The Problem & Market for Valcor Consultants
Today’s small business owners are dealing with a host of problems that cause slowing cash flow which can lead to litigation, bankruptcy, and even the closure of an otherwise viable business. No matter whether the broader economy is in recession or growth, there are always businesses that are at the precipice of ruin. Our clients companies are run by stressed and worried business owners who have invested their life into the business, along with the team of loyal employees.
Key stats
- There are approx. 32 million small businesses in the US.*
- 60%-80% of all new jobs created in our country can be attributed to small business.*
- Small businesses with less than 100 employees represent 99% of all employers. **
Creditors have law firms, collection agencies, and banks on their side, and most small business owners feel they are alone with their problems. Valcor consultants take over the stressful creditor negotiation to create amicable solutions both sides are happy with.
Whatever the national economic indicators are suggesting, there are always small businesses facing challenges caused by complex issues including industry-specific slowdowns, internal strife, politics, inability to secure capital and lending, government regulations, and macroeconomic situations overseas. In many cases, our clients simply lost their largest customers and resulting in cash-flow slowing to a trickle, while expenses remain high.
Case Studies
A Californian garment import company depended on a wholesaler based in Pakistan to ship clothing overseas. Due to the insurgency of a local band of extremists, all western business interests were required to leave the city for several weeks. This caused the VALCOR client to be unable to fulfill an order of $100,000 which was already paid for. After attempts to delay the order, the customer demanded their payment returned, most of which was already spent.
By providing a quick resource of working capital while reducing the amount owed to the customer (by 80%), the import company was able to stay solvent and even maintain their business relationship with the customer for years to come.
A Midwestern chain of local pharmacies lost over 50% of customers to the new large 'big-box' stores. Also, changes in healthcare and the big-box stores' 'internal saver' programs now threatened to put the smaller pharmacies out of business. With slow cash flow, working capital to increase sales was almost non-existent. Creditors were threatening legal action and the owner was unable to meet the obligations. Through a combination of restructuring all the debts between 63%-75% and introducing much-needed capital, the owner now had the ability to increase their marketing budget which allowed the business to increase and save the entire chain of small stores.
A consortium of Southeastern gas stations and convenience stores were seeking to refinance their commercial property loans with their bank. However, due to the collapse in values the bank was not willing to help the owner. Seeking over $50 million in funds, Valcor was able to secure an alternative lender to fund the entire amount allowing a bank buy down offer to be accepted by the bank. The owner received a new loan with a lower interest rate, more favorable terms, and sufficient cash available to service the new debt.
An owner of a private chain of women's clothing retailers was forced to shut down by the local county. They lost employees who participated in the state unemployment insurance and as much as they tried to sell products through social media and even calling loyal customers with special private sales, the drastically reduced income was not enough to pay their leases and bank loan, never mind salaries. After a paltry amount from the Payment Protection Program, the owner considered shutting down the stores completely. By restructuring the bank loan, lease payments with once intransigent commercial property owners and securing additional funds for working capital, the business owner now has room to breath while the economy takes time to recover.
The local effect
Without a Valcor consultant, these business owners could potentially end up in costly and time-consuming litigation that could lead to bankruptcy or the closure of their business. As a result, numerous families would lose a valuable source of income, placing many people unnecessarily out of work.
Valcor resolves the problems facing these businesses with the focus on maintaining their viability to ensure ongoing daily operations with little interference and loss of jobs.
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Sources: (1) Small Business Administration (2) Infographics.com
