Small businesses comprise 90% of 30,000,000 businesses in the United States, create 60% of all new jobs, contribute to 55% of the United States’ GNP, and pay 70% of the federal taxes. While FMC Financial Services, Inc. (FMC) focused on the needs and solutions for small businesses, it became obvious that there were two other external components necessary for a company’s success; banking and accounting. Whereas, a small business sells services and products, a bank sells money, and an accounting firm sells reporting used for bank loans and company decisions. From its beginning in 1978, FMC has developed various approaches for growing small businesses.

The successes of a small business owner, a banker, and CPA are connected and interrelated in such a way that each depends on the other for their success. For example:

a. A small business will often seek financing critical for their growth from a bank, primarily a community bank that grows its loan portfolios and profits by lending to businesses.

b. Accounting is the corner stone of financial language that bridges the communication gap between banks and business owners.

c. CPAs need business clients to grow their practices.

As each recognizes that their success is dependent on each other’s success, the potential for growth can flourish. FMC refers to this as the Triangle of Business Growth© which is depicted below.

FMC Triangle of Business Growth©

Challenge

Although small businesses, bankers, and accountants are interdependent on one another for growth, they do not use the same terminology resulting in poor communication.  The reason is that each has developed their “own” language which is based on their different frames of reference and objectives. The small business owner is trying to grow and increase the wealth of his or her company; the banker is obligated to protect the depositors, shareholders and comply with banking regulations; and, the accountant most often is trying to reduce the business owner’s taxes, thereby reducing or eliminating business profits. Because of these differences, conflicts arise stifling growth for each party as well as undermining the opportunity to maximize overall business growth.

Solution

FMC has developed individual value propositions and services specific to small businesses, banking, and accounting that will maximize the overall growth for each business.

As a result of Congress’ approval 9-28-2010 of HR Bill 5297, the opportunity for financing and growing a small business has never been better during these economically challenging times. Below is a snap shot of key points to consider.

ELIGIBILITY

Based on the changes in the government size standards in order to be classified as a small business, now approximately 95% of all companies (32,000,000) in the United States qualify. The new standards are:

• tangible net worth of the company is less than $15,000,000
• net profit is less than $5,000,000 for the past two years

KEY FINANCING FEATURES

• PROGRAM SBA 7-a- Financing up to $5,000,000
  • operating capital, inventory, accounts receivable financing – up to 10 years
  • furniture, fixtures, equipment – up to 15 years
  • owner occupied real estate – up to 25 years
  • interest rate negotiable
  • government loan fees temporarily waived
  • personal guarantee
• PROGRAM SBA 504- Financing up to $11,000,000
  • real estate – up to 25 years, acquisition, expansion, refinancing; in special cases the real estate does not be owner occupied- example mini warehouse storage units
  • equipment – up to 15 years, new
  • two notes- a government CDC note and a Bank note
  • interest rate: government CDC portion has currently a 5% fixed for the term of the loan; subject to change; Bank portion’s rate is negotiable
  • government fees are included in the government loan interest rate
  • personal guarantee

If your company needs SBA financing, our advisors are standing by to meet with you to assist you with the process. You may contact Gary Lyles at 972-243-8599 (office) 972-951-3377 (Cell) or by e-mail gary@fmcfinancialservices.com

Small Business Investment Company
(SBIC) In 1958 Congress created The Small Business Investment Company (SBIC) program which are licensed by the Small Business Administration, and are privately owned and managed investment firms. They provide venture capital to small independent businesses, both new and already established. All SBICs are profit-motivated businesses and not only fund loans but inject equity. Loans may have a maturity of no more than 20 years and can be structured as subordinated debt with detachable warrants that can be converted into stock at the appropriate time. SBICs may not invest in the following: other SBICs, finance and investment companies or finance-type leasing companies, unimproved real estate, companies with less than one-half of their assets and operations in the United States, passive or casual businesses (those not engaged in a regular and continuous business operation), or companies which will use the proceeds to acquire farm land. An SBIC is not permitted to control, either directly or indirectly, any small business on a permanent basis. The cost of money on SBIC loans is regulated by the SBA and is governed by applicable state regulations, or by SBA regulations. In general, investment funds used to purchase securities must go directly to the small business concern issuing the securities.

Minority Enterprise Small Business Investment Company (MESBIC)
They function identically as SBICs but only customized programs for minority owned businesses.

Private Equity
FMC has developed several preferred investor sources many of which are previous owners of companies that FMC assisted in their exit strategy. The typical investment is made in amounts ranging from $500,000 to $6,000,000 to private companies with revenues of $5 to $50 million. We look for companies that seek growth capital to take advantage of market opportunities or to meet the capital needs created by:

• buyout a retiring partner,
• acquire a competitor,
• capital to expand market share

We have the capacity to do structured financings consisting of the placement of preferred debt and to raise investment capital through the preparation of private placement memorandum . In addition, we have the ability to guide a client through the IPO or initial public offering of their stock on the open markets. The subject matter where the greatest familiarity exists are health care projects, medical office buildings, senior living projects and speciality health care such as memory care, Alzheimer’s, and adult psychiatric programs. Further, FMC can guide a client through the equity raise and debt placement in light manufacturing, car washes, marinas, and apartment projects .

The investment bankers of FMC can also assist with government contracting through our relationships with Alaska Native Corporations and Native American tribes of the lower forty eight states. These take the form of teaming agreements, equity investments in your businesss or the out sale of your business where we act as financial advisor to your business.

To view a list of representative transactions the FMC investment bankers have participated in, please visit our Tombstones page.

FMC Financial Services, Inc (FMC) has developed proprietary software used to grow the wealth of a business. It is based on a concept developed by FMC titled Strategic Wealth Targeting® (SWT) . Using this approach, the business owner will view the value of their business as they would the value of their 401K or other retirement plans. A traditional retirement plan usually gives the control to an investment advisor to make the correct decisions to hopefully increase the value i.e. “wealth” of the retirement portfolio. Similarly, the business owner using the SWT approach can chart a course to create a predetermine value of the company at its exit.

Each month the model calculates 23 ratios and trends and compares them against industry ratios to determine whether the business is financially healthy. In addition each quarter an “indication of value” is calculated, and if it is not increasing, then the ratios are reverse engineered to determine where the weaknesses exist in business practices and management’s behavior, and corrections are made. This sets a foundation for the value of the company to continue to grow which increases the wealth of the business owner. For example, if the company has set a wealth target (valuation) of $10,000,000 for the 24th month, adjustments leading up to the 24th month can be made each quarter to hit the wealth target set.

An additional feature of the financial model is that a variety of scenarios can be run to assure that if certain business decisions are made that they will not cash starve the business and that the proper amount and type of financing is deployed at the correct time. In other words SWT functions as a simulator to determine the economic effect of decisions before they are actually put in practice.

If the business owner feels uncomfortable interpreting financial ratios and trends, the SWT software is designed to automatically create a written text that offers decisions that should be made in order for the company to attract capital for growth while increasing the company’s wealth.

• FMC Value Proposition
• Outsourced Government Lending for SBA 7-a, SBA 504, USDA
• Government Loan Programs

• FMC Value Proposition
• Continuing Professional Education
• Workshops and Seminars