New
Places To Find Money:
UPS Delivers Cash, Too!
UPS
is known for its big, brown trucks and friendly but efficient drivers.
Back in 1990, though, it was facing shrinking profit margins and
a business that was not growing quickly. The company chose to focus
on customer service and the technology to deliver it. Since then,
UPS has become a highly admired company. Fortune magazine just named
it tops in its category for the third year in a row.
UPS
committed to using technology advances to improve customer service.
Today, a UPS customer, or a customer waiting for UPS delivery, can
use web-based tracking services to follow a package from pickup
to delivery. It is THE delivery service for many small businesses,
with great software, tracking numbers and good pricing.
Last
year, UPS, which had been a private company since it was founded
in Seattle in 1907, sold 9% of the company to outside investors.
The founding families, managers, employees and retirees own 90%,
according to Hoovers. The purpose of the sale was to raise money
for two new business lines: UPS Logistics, which provides supply
chain management* for customers and eVentures, which helps provide
support for e-commerce and Internet-based firms and UPS Capital,
which provides financial services for UPS customers.
Did
You Say Money For Small Business?
Yes.
UPS has financial services available for their customers and also
invests in and incubates technology companies that are working on
products and services that may help UPS provide better services
for their customers. The UPS Capital Corporation has a number of
useful financial services that are available for small businesses.
These include:
- C.O.D. Enhancement Services - UPS shippers can get
their money for collect on delivery customers much more quickly.
Instead of waiting for UPS to ship checks back to you, UPS processes
your collections. Result: Your customers have another payment
option and you get your money faster than regular collect on
delivery. There are two choices.
- UPS C.O.D. Automatic provides "advance funding" (before
normal collection and transmission would get it to you)
and deposits funds with the bank of your choice. The funds
are usually available within 2 - 3 days after delivery.
They offer an optional automatic second presentation of
NSF* checks and return NSF checks to you for collection.
They provide daily statements showing your deposits, fees
and adjustments. You can easily and securely check your
daily statements online and download the results.
- UPS C.O.D. Direct Deposit deposits checks directly to
a Bank One account for your business. Deposits are generally
made within 2 - 3 days after delivery and the funds are
available after the check clears, usually 3 - 5 days later.
They also provide secure, daily information so that you
can check and download the results online.
- Distribution Finance. Accounts Receivable Financing. This
is an alternative to a loan or line of credit for small businesses
with small inventories or service providers. Many standard business
loans are secured by inventory. Accounts Receivable financing
takes the money you are due from your customers and makes it
available to your business for a fee. This is also called "factoring"
and is available from many other sources. The advantage for
established small businesses working with UPS is that the money
is available the next day, without risking your business' credit.
In times when many customers think 30 - or 90! - days are the
"same as cash", accounts receivable financing can keep you from
stretching your business credit to carry your customers. As
UPS points out at their website, it can also help you take advantage
of special offers from your suppliers or deal with unexpected
expenses. Your customers will send their checks, payable to
your business, to a UPS lockbox, so it is transparent to your
customers.
- Asset Based Lending - UPS Capital will advance you
money based on a percentage of your accounts receivable and
inventories.
- Capital Asset Based Lending - Need money for a longer
time period without having to submit requests as accounts receivable
become available? UPS also offers 1 - 5 year loans secured by
your business assets.
- Inventory Finance is a secured line of credit backed
by your inventory. If you've got a seasonal business, with inventory
buildups at specific times of the year, this can be a great
choice for you.
- UPS Capital Inventory Finance is for larger businesses,
often manufacturers, dealers and distributors with usual loan
terms of 2 - 5 years. UPS is innovative in setting repayment
schedules that are not necessarily based on the monthly requirements
of most financial institutions but rather the actual flow of
your business activities.
- Equipment leasing-This is an option that we often recommend
to our own business clients because it simplifies tax situations
for small business owners and can provide some real advantages.
UPS Capital offers equipment leases for amounts as little as
$1,000 and to $250,000 or more. For leases under $25,000, they
claim to be able to approve usually within 3 hours.
- Global Trade Finance - this is where UPS shines for
small business. Exporting products can be painful and the paper
chase to deal with international exchange of money and goods
can intimidate any business that does not do it on a regular
basis. In many cases, the bank that you use for most of your
financial services is not geared to helping you with international
business. It is a key to growth, particularly since 50% of online
sales by 2004 are projected to be international. These services
make it possible for small businesses to compete all over the
world. As UPS points out, they do business in more than 200
countries and speak the language.
"Quite
simply, UPS Capital Global Trade Finance provides 100% bad-debt
protection on approved receivables, handling your overseas collections,
and advancing the working capital you need to keep your business
moving forward."
They
pre-approve your buyers and advance up to 80% of the invoiced amounts
to you. They handle collections and send you the rest after deducting
their fees.
Many
small businesses have never had to deal with a letter of credit.*
UPS can help you find and manage lines of credit, even if you have
them with a number of different banks or other lenders. They can
also help you manage your money and determine the risks involved
in your export activities. Under some circumstances, it may even
be possible to have finance against letters of credit.
Are
you importing a product? They can help you arrange for a letter
of credit to pay them-and, with their extensive customer list, UPS
may already know your supplier. That kind of connection, where they
can offer financial services to both parties, can make your business
move faster and perhaps save some costs.
Find
UPS Capital either online at http://www.upscapital.com/
or call them at
1-800-441-8502.
*
ABC's of Small Business Buzzword Alert!
Letter
Of Credit - an agreement to pay for checks presented under a
prearranged line of credit. How does this help you? Well, instead
of company Z promising to pay you, a letter of credit assures that
company Z's bank will pay you, significantly reducing your risks
on the sale.
Logistics
- obtaining, maintaining and transporting resources, buildings and
other facilities and people.
NSF
- shorthand for nonsufficient funds - in other words, the check
bounced.
Supply
chain management - bringing together and having control over
the everything that you need to make your product and deliver it
to your customers.
-Cynthia
Nemeth-Johannes
