Monday, March 31, 2014

IPCC: No One Is Immune From Effects of Climate Change

The Intergovernmental Panel on Climate Change (IPCC) has issued the 32-volume, 2,610-page report on the changing global climate. The report sounds a clear alarm that global climate change is accelerating and its consequences are having immediate impact on the world’s ecosystems. 

Scientists warn that steps must be taken to mitigate the social impact of climate change and prepare communities to adapt to shifting environmental conditions.

This is the fifth report issued by the IPCC. The first report was published in 1990 with subsequent updates issued every 5 years. The report, prepared by teams of independent scientists noted two immediate consequences of global warming. Michael Oppenheimer, a lead scientist on the commission noted; “the first consequence is rising mortality rates due to heat waves. Last year over 35,000 people died as a result of prolonged heat waves. Another current impact of climate change is declining crop yields. The study reports that occurrences of declining crop yields dramatically rose while occurrences of increase yields steeply declined”.  

Earlier reports of the IPCC advocated for the need to slow the rate of growth of carbon emissions with Cap and Trade market mechanisms. Failing to do so, the world would begin to experience the adverse effects of climate change by the close of this century. Subsequent reports indicated that evidence of climate change was growing and shortened the time frames when the impact of global warming would occur. The report released today indicates that the effects of global climate change are presently occurring and immediate action is required to mitigate the risks and adapt to the inevitable changes in the global environment.

Examples of the effects of climate change cited in the report are numerous. Persistent drought conditions in the Western United States, Australia and Sub Saharan regions and its effect on crop failures, agricultural yields, massive wildfires and water shortages. Accelerated glacial melt in the Himalayas, North America, the Polar Regions and Greenland and its impact on ocean currents, sea rise levels and massive mega storms that are growing in intensity and frequency. The thawing of permafrost soils near the Arctic Circle is releasing massive amounts of methane gas accelerating the greenhouse effect. Deforestation and clear cutting of old growth forests, and the burning of the Amazon and Indonesian flora biomass produce massive carbon emissions into the atmosphere. Paris, Beijing, Mexico City, Dallas Fort Worth and Singapore routinely experience poor air quality conditions due to excessive burning of fossil fuels. 

As the evidence of global climate change proliferates the divisive politics it engenders grows. Climate change deniers seem to represent industry segments tied to the use of fossil fuels. To solve the complex problem of global climate change the diverse interests of competing stakeholders must be moderated by leaders endowed with the political will to address this multifaceted social problem. 

Risk managers representing private industry, government agencies, community planners, disaster response and NGOs must fully engage the threats and opportunities presented by global climate change. Understanding the increasing velocity of this threat, its growing complexity and interconnectedness to other problems, its growing pervasiveness across regions and ecological topographies and how geophysical conditions aggregate multifaceted factors that compound the problem; make mitigation initiatives and adaptive strategies difficult to implement. Risk managers must transcend narrow parochial interests to engineer innovative solutions to these multidimensional social problems. 

Sum2 understands that humans cannot escape the geophysical conditions of our earth bound home. People and communities cannot escape the realities of geophysics. Citizens are called to engage the challenge of global climate change with courage, thought leadership and inspired innovation. 

Get risk aware with Macroeconomic Risk and Event App (MERA) on Google Play; a Mobile Office app that runs on MS Office and Android. MERA helps SME's assess emerging risk factors to mitigate and adapt to the challenges posed by global climate change.

Get Risk Aware

risk: IPCC, Report on Global Climate Change, agriculture, aquaculture, political stability, water rights, mega storms, greenhouse gases, wildfires, air pollution, smog, deforestation, regulatory, report, climate change

Sunday, March 30, 2014

PwC Risk in Review 2014 Survey

Pricewaterhouse Coopers (PwC) has published its annual Risk in Review survey. Nearly two thousand global corporate professionals representing a broad cross section of industries responded to provide insights into how their organizations meet the challenges of enterprise risk management.

The study was published against the backdrop of an emerging Eurozone recovery, US Sequester driven GDP decline, BRICS vacating the leadership role of global market drivers, the factory collapse in Bangladesh, the political turmoil of the implementation of the Affordable Care Act and Eric Snowden’s revelations of NSA privacy violations. 

The previous year survey reflected the perspective of corporate managers still smarting from the economic effects of the Great Recession and global credit crisis; by anointing financial distress and market uncertainty as the principal driver of corporate threats. This years survey cited technological change, IT risks, regulatory complexity and rapidly changing customer needs as the primary focus of corporate risk management programs.

The survey examined the intimate relation of external risk factors and how the organization has aligned its internal GRC processes to address both external and internal risk drivers. The survey identified the ten most common risk management capability gaps. It also offered an evaluative framework to distinguish corporate risk leaders, early stage adopters and organizations beginning to develop a more formalized risk aware culture. 

The survey is an excellent examination of the components of a risk aware enterprise and a proposed framework to develop a risk aware culture within a commercial enterprise. The survey can be downloaded from the PwC website. 

In future posts we will examine some of the major points the survey raises to promote a more risk aware corporate culture.

Sum2 publishes a series of risk management apps for SME’s. Our leading product Credit|Redi provides a full complement of risk assessment tools to implement a risk aware corporate culture. Credit|Redi generates in-depth financial analysis reports that spot strengths and weaknesses in a company's financial condition. Credit|Redi also provides a series of enterprise assessment applications to monitor risk and determine opportunities for business growth to build a risk aware enterprise that wins the confidence of lenders and stakeholders.

Get Risk Aware on Google Play here. Get Credit|Redi

Get Risk Aware

Risk: GRC, PwC Risk in Review, SME, risk culture, ERM, IT, customer risk, capability gap, risk appetite, change management, stakeholder communication, regulatory risk 

Friday, March 28, 2014

SME World 2014: Transparency Gets the Loan

Though 90 per cent of Dubai registered companies are small and medium enterprises (SMEs), just 4% of all business loans goes to SMEs. In developed economies lending to SMEs goes well into the double digits. 

Vikas Thapar, CEO, SME Business, Emirates NBD, offered this observation during a panel discussion at SME World 2014 in Dubai.  Mr. Thapar went on to explain that banks are reluctant to provide loans to SMEs because of regulatory compliance restrictions and the lack of transparency in SME business.

Questionable financial health and lack of transparency are two of the principal reasons small businesses get turned down for loans. Lenders need objective insights into a small businesses financial condition.  Lenders also require a level of confidence in an SME's business plan to determine creditworthiness.  Meeting these two conditions by lenders are critical steps to securing financing from lenders.

SMEs improve their chances of getting the funds they need to finance growth by demonstrating creditworthiness.  SME's accomplish this by providing lenders with an objective credit rating and financial health assessment report. Self generated Z Score reports are excellent measures of an SMEs creditworthiness.  A Z Score credit rating combined with a well thought out business plan offers lenders the degree of transparency they require to close a loan with an SME.

Credit|Redi is a tool that demonstrates an SME's creditworthiness to lenders and capital providers. Credit|Redi generates a Z Score credit rating and in-depth financial analysis reports that spot strengths and weaknesses in a company's financial condition. Credit|Redi also provides a series of enterprise assessment applications to review problem areas and determine opportunities for business growth to build a bullet proof business plan that wins the confidence of lenders. 

If your business is looking for a loan or trying to raise capital:

Get Credit|Redi on Google Play here. Get Credit|Redi

risk; sme, credit redi, sme lending, credit risk, Z Score, credit rating, SME World 2014 Dubai, Vikas Thapar CEO SME Business Emirates NBD 

Thursday, March 27, 2014

A Taxing Problem: Digital Assets and Global E-Commerce

The Independent reports that Ireland's Chartered Accountants are warning that "new OECD proposals on taxing hi-tech multinational companies will fundamentally change business landscape." 

The OECD has published a draft discussion on companies operating in the digital economy.  The question of determining tax liability for companies with a business model spanning multiple countries is a growing concern for national tax agencies. Outsourcing, offshoring, the use of tax havens and global e-commerce are perplexing tax authorities seeking to enforce outdated national tax codes written before the explosion of the global digital economy. 

The report proposed redefining when and where a company is liable for tax; suggesting a company would have a tax liability in a country where it had a "significant digital presence".

Ireland is particularly sensitive to this issue in wake of it's recent tax dispute with Apple and other multinationals with operations in the tax friendly EU nation.

Revenue recognition in a rapidly changing global economy with a growing preponderance of digital assets, intellectual capital and digital specie like Bitcoin raise important questions for corporate managers, tax authorities and regulators. Defining revenue, asset types and national jurisdictions of taxing authorities pose great challenges for tax professionals, corporate management, legislators and revenue agencies. Leveraging global disparities in national tax laws to arbitrage local tax codes is the mark of shrewd treasury management. It can also raise questions with tax agencies.

SME's involved in global digital e-commerce must become aware how the evolving tax code opens the door to tax controversy that rises audit risk factors from national revenue agencies.

Sum2 developed the IRS Audit Risk Program (IARP) to provide SME’s an audit risk assessment tool to keep the taxman away from the door. IARP outlines tax code focus areas where caution should be exercised when filing tax returns. Business owners can rest a bit more easy that audit risk is being effectively managed. Get Tax Audit Aware with IARP.

Get Tax Aware

Risk Bitcoin, CPA, digital assets, e-commerce, EU, global economy, IARP, income repatriation, Irish Independent, IRS, multinational, OECD, off-shoring, outsourcing, revenue recognition, risk: tax, sme

Tuesday, March 25, 2014

SME's Stand Their Ground to Get the Loan

Terrific piece on SME lending in yesterday's Irish Independent. 

More than half of all lending decisions appealed to the Credit Review Office by small and medium enterprises (SMEs) are overturned. This is a good lesson for SME's to be persistent in the face of rejection. SME's that can show confidence in their business prospects and demonstrate a creditworthiness can turn a negative decision into a green light. The key to this happy reversal of fortune is being able to provide evidence of creditworthiness and present a business plan that will use the loan capital wisely to produce profitable business growth. 

The Credit Review Office was set up to make sure that loan applications by SME's received fair consideration by lenders. The EU banking sector was severely effected by the global credit crisis. The EC "PIGS" (Portugal, Ireland, Greece and Spain) were especially hard hit. 

When the credit bubble popped, asset valuations dropped like a rock. The good fortune of SME's evaporated as the drivers of their prosperity,real estate, construction and service sectors crashed.

SME's were confronted with two immense business challenges. The first was creating a business that could adapt to a drastically changed business environment. The other was to convince lenders in a capital constrained economy that they were a good credit risk and that their business plan will generate sufficient returns to grow the business and pay off the loan.

Credit|Redi is a tool that demonstrates an SME's creditworthiness to lenders and capital providers. Credit|Redi generates a Z Score credit rating and in-depth financial analysis reports to spot strengths and weaknesses in the company's financial health. Credit|Redi also provides a series of enterprise assessment applications to review problem areas and determine opportunities for business growth to build a bullet proof business plan that wins the confidence of lenders. 

If your business has been turned down for a loan don't give up.

Get Credit|Redi on Google Play here. Get Credit|Redi

risk; sme, credit redi, EU, Credit Review Office, Irish Independent,  sme lending, credit risk, Z Score, credit rating,"PIGS", Portugal, Ireland, Greece, Spain, ECB, AIB


File an FBAR or Find Yourself Behind Bars

A few years ago the IRS offered a tax amnesty program for US citizens who failed to declare assets held in foreign bank accounts. This came on the heels of a highly publicized legal action against UBS. The IRS forced the Swiss based bank to turn over the account information of US citizens. The IRS was clamping down on tax evaders, exploiting the protection of Switzerland's bank secrecy laws to hide income and assets. The IRS was looking to determine if FBARs had been filed by the banks US citizens.

Individuals and corporations with assets greater then $10,000 held in foreign bank accounts must file a Foreign Bank Account Report (FBAR) with the IRS or face potential legal action.

UBS counted 52,000 US citizens as private banking clients. It would be safe to assume that most of those accounts had balances greater then the $10,000 declaration threshold. 

Any US investor participating in a foreign based fund partnership or investment vehicle must also file an FBAR. High Net Worth (HNW) investors and their tax advisers should conduct due diligence on private bankers and asset managers to confirm that FBARs and appropriate declarations and forms have been filed by investment partnerships and their administrators. HNW tax advisers should contact the chief compliance officer at the fund to request an attestation letter stating that the fund is in full compliance with foreign bank reporting requirements.

Bernie Madoff and Sir Allen Stanford may look good in orange prison jumpsuits but that doesn't mean it will look good on you. Don't become a slave to fashion. Get compliant. Check with your tax adviser to make sure FBARs are filed.

Get compliant and file an FBAR with Sum2's AML SAR Filing BSA Reporting App. The app is used by financial institutions, compliance professionals and industry service providers to comply with Anti-Money Laundering (AML) best practice provisions and regulations. Protect your clients and your business from money laundering risk with this critical compliance application.

Since 2002,  Sum2's AML compliance products have helped investment managers, broker dealers, MSB's, banks and credit unions comply with the AML provisions of The Patriot Act, BSA Reporting and OECD best practices. 

Get AML aware. Download AML SAR Filing / BSA Reporting App on Google Play.
Get AML Aware
Risk: AML, FBAR, legal, compliance, tax, reputation, criminal prosecution, IRS, OECD, Patriot Act, MSB, private banking, hedge funds, CPA, UBS, Credit Unions, SAR filing, BSA Reporting

Monday, March 24, 2014

Singapore Sling: Basel III Amps SME Credit Risk

SME lending just got more expensive in Singapore. Basel III capital requirements has increased the risk weighting on SME loans. Banks are now required to set aside more capital to protect against SME loan defaults. This will drive up the cost of capital for SME’s as lenders pass on added costs to borrowers to maintain healthy margins on SME loans; Singapore’s Business Times reports.

SME’s are a critical driver of economic growth in Singapore. Bank loans to the segment grew more than 10% in 2013. At DBS Bank, SME lending produced a $1.8 billion increase in revenue. 

The Government of Singapore has long been friendly to SME's and remains committed to support the segment as a keystone to the economic recovery of this vibrant Asian Tiger. The government has maintained a risk sharing program to guarantee 50% of an SME loan. Due to the increase in the loan loss reserves mandated by Basel III; the government will now increase its risk share to 70%. It is hoped that this will protect the the flow of capital to SME's.  

This regulatory initiative is another example of the compounding macroeconomic risk factors confronting SME’s. Shifts in credit market conditions and healthy functioning credit channels are major risk factors for SME’s. Acute macro risk, forces market players to compete for capital during restrictive business cycles. SME’s must assess macroeconomic risk factors surrounding the capital funding landscape to maintain profitability.

Get risk aware with Macroeconomic Risk and Event App (MERA) on Google Play. Its an Mobile Office app that runs on MS Office and Android. MERA helps SME's  assess emerging risk factors to profit from the opportunities shifting markets present.

Get Risk Aware

risk: sme lending, regulatory, credit risk, Basel III, Singapore, DBS Bank, OCBC, UOB, macroeconomic risk, Strait Times, Singapore Business Times, government spending

Sunday, March 23, 2014

Anatomy of a Tax Audit

Its that time of year again.  April 15th looms ever larger as small businesses scramble to meet the IRS  tax filing deadline.  For many small businesses, tax filing is handled by a trusted accountant or business adviser. That tends to take the trauma out of this annual exercise in pain.  But even with the help of a tax professional the angst of the season is always a pressing concern.   

The enclosed infographic published by oBizMedia, displays some startling data about audit risk and its cost to small businesses.  For example in 2011 over 50,000 small businesses were audited by the IRS.   The IRS recovered over $30 billion in taxes as a result of auditing business returns.  A considerable sum of money that small businesses once counted as profits now paid to the tax man.  That can turn a good year of business into a not so good year.  

Its only natural that during times of economic adversity all business owners want to keep as much as they can.  During these times some business owners may be a bit more aggressive in its tax strategy to minimize tax liability.  It's a risk that unfortunately can come back to haunt SME's with additional tax liabilities, fines, penalties and costly litigation.

As the tax filing deadline approaches it is important to keep in mind the various audit risk factors certain deductions raise with the IRS. In the past the agency has published guidelines agents utilize to risk profile tax returns. Claiming these deductions heightens the risk of an audit by the IRS. It is a critical that SMEs are aware of these audit risk factors and incorporate this intelligence into its tax filing strategies. 

Sum2 developed the IRS Audit Risk Program (IARP) to provide SME’s an audit risk assessment tool to keep the taxman away from the door. IARP outlines tax code focus areas where caution should be exercised when filing tax returns. Business owners can rest a bit more easy that audit risk is being effectively managed.  Get Tax Audit Aware with IARP.

Get Tax Aware   
risk: tax code, tax audit, regulatory compliance, accounting, legal,
*Be sure to consult with your tax adviser for guidance on tax strategy and audit sensitivities specific to your business,  

SME Capital Formation: Money to Main Street

Dun & Bradstreet has initiated a timely capital formation initiative for small businesses. Access to Capital - Money to Main Street is an event tour that will bring together regional providers of funding for small businesses and start-ups.  

Economic recovery is combining with technology to energize innovations in small business funding options. Money to Main Street looks to promote the numerous funding options that are open to small businesses. Crowd-funding, micro-lending, asset financing, leasing, community bank loans, credit unions and traditional venture capital channels are a few of the many options available for small business funding. Each channel offers distinct terms and advantages that match a funding option to the specific situation of a small business. 

The Money to Main Street campaign will bring together the stakeholders and providers of local funding alternatives to make owners aware of options to get capital flowing into the segment. The tour kicks off in Phoenix on the 26th of March. 

Registration, conference sponsors and agenda details are available at this link, Money to Main Street.

Sum2's clients use Credit|Redi to determine financial health and creditworthiness. Credit|Redi provides users business assessment applications to optimize financial performance and create business plans that are sure to win the confidence of lenders and capital providers. Credit|Redi improves profitability, reduces risk and enhances creditworthiness.  

Sum2 has no commercial affiliation to any of the sponsors of this event.

Get Credit|Redi on Google Play here. Get Credit|Redi

risk; sme, credit redi, micro lending, private equity, SBA, Money to Main Street, capital formation, crowd funding, alternative financing, credit union, commercial loan, D&B, Accion, Phoenix AZ

Thursday, March 20, 2014

Opening SME Credit Channels

Golden Pacific Bank in California has created a new lending subsidiary to provide SBA loans for small mid-size business enterprises (SME). The program called SmartBiz uses an advanced technology platform that allows the bank to reduce the cost of borrowing and extend credit more efficiently to creditworthy SMEs. 

The lending platform was developed by the firm BillFloat. The technology enables SmartBiz to efficiently originate, process and close SBA loans. The cost of processing loan applications and credit decisioning time frames are reduced; positioning the lender to better serve the credit requirements of small business clients. 

SmartBiz is looking to reduce a typical credit decisioning time frame from 90 days to less than a week. The bank believes its technology to be a competitive advantage; enabling the extension of longer term loans, lower rates, lower monthly payments expanding the choice of finance options currently available to small businesses. 

Golden Pacific is a community bank with $132 million in assets. Deploying the new lending platform will drive operational efficiency, strengthen compliance mandates, increase the banks return on capital and generate significant fee income for the bank. 

Sum2's clients use Credit|Redi to determine financial health and creditworthiness. Credit|Redi provides users business assessment applications to optimize financial performance and create business plans that are sure to win the confidence of lenders and capital providers. Credit|Redi improves profitability, reduces risk and enhances creditworthiness.

Get Credit|Redi on Google Play here. Get Credit|Redi

risk; sme, credit risk, lending, private equity, financial health, risk assessment, credit repair, business planning and analysis, SBA loan

Tuesday, March 18, 2014

We Can Work It Out: SME Credit Repair

As the US economy slowly emerges from the great recession many small businesses are looking upon battered and bruised balance sheets and income statements.  Before the downturn they looked young healthy and vibrant but the distress of the credit crunch, high unemployment and record business closures has taken its toll. Receivables growing longer in the tooth each month.  Write offs of bad debt up. Client defections, pinched profit margins and market erosion due to decreased buying power, business closures and clients going with competitors offering rock bottom pricing.  

No the balance sheet doesn't look as healthy as it did during the salad days of the past decade but the good news is the business survived a damning business cycle. Time to conduct a credit analysis exercise to get the company financial statements back into shape.

Here are seven quick questions one needs to answer to assess an SME's credit worthiness. 


Do your business leaders have the talent, experience, character, leadership, and knowledge of the business to succeed?  If not, what should be done to close those gaps?

Are the right people in the right jobs? Should people be repositioned to optimize fit and overall performance? Should you make strategic hires to improve your talent mix in critical functions across the firm?

  • What is the overall health and landscape of your industry? 
  • Who are the primary and secondary competitors? How is their health? 
  • What does the SWOT analysis reveal for your industry and competitors? 
  • How healthy are your balance sheet and income statements? (Compare to previous financials over 1, 3, and 5 year periods.) 
  • What are your pro-forma projections? (1, 3; 5 yrs) 
  • What significant trends do you observe? 
  • What should you be doing based on the trends you have identified? 
Use of funds
  • Why do you need funding? 
  • How will the funds be used - 90 days, 1, 3, 5 yrs? 
  • (The key here is to describe in detail with specific usage, timing, and activities.) 
Sources of Repayment
  • What are your firm’s primary, secondary, and tertiary income streams? 
  • How reliable or likely are those sources going forward? Most importantly, are those revenues diversified and recurring? 
Customers and Suppliers
  • What are the composition and attribution metrics? Most importantly, are there any concentration risks? If so, what can be done to mitigate them? 
  • How healthy are they?
  • What are the demographics driving both groups? 
  • Where are they in their client or product life-cycles? 
  • Where are your suppliers in your products and services value chain? 
Products and Services
  • Ask the same questions listed for Customer and Supplier. 
  • What are the consumer demand, utilization metrics, and trends for your existing offerings? 
  • What new products and services are in your pipeline? How do you envision those new products and services impacting your financials (balance sheet, income statement, and statement of cash flows) and business strategies going forward? 
  • What are your competitors offering? How does that impact your business?
This cursory assessment will get you started.  

Sum2's clients use Credit|Redi to rate company credit worthiness and conduct business analysis to optimize financial performance and create business plans that are sure to win the confidence of lenders and capital providers.

Credit|Redi used by effective SME managers to improve profitability, credit worthiness and grow the confidence of lenders and shareholders.
Get Credit|Redi on Google Play here. Get Credit|Redi 

risk; sme, credit risk, lending, private equity, financial health, risk assessment, credit repair, business planning and analysis

Monday, March 17, 2014

QE Taper Risks Spike in Global Interest Rates

Forbes Reports:

"...The Federal Open Market Committee (FOMC) expects the taper of the Quantitative Easing to continue. Economists expect the Federal Reserve to cut another $10 billion from its monthly asset-purchase program at its two-day monetary-policy meeting, lowering its monthly bond buys to $55 billion.

The FMOC meets Tuesday and Wednesday, and it will be the first one overseen by new Fed Chair Janet Yellen. Bond traders will focus on the commentary that accompanies the decision, which is slated to be released Wednesday afternoon. Additionally, during this meeting, the Fed will release its new economic forecasts..."

The Feds reduction in asset purchases, (primarily mortgage backed securities from banks and market makers) reduces market liquidity and cheap source of funding for banks. The goal of the Fed's QE has been to buttress the capital structure of banks to assure liquidity in credit markets. The QE program has been successful in maintaining low interest rates. This has benefited SMEs by keeping the cost of capital low and credit channels open.

Low interest rates have helped SMEs to borrow cheap money. Low interest rates have also benefited consumers by keeping borrowing rates for mortgages, car loans and credit cards low. This has stimulated market demand for SME products and services. QE has been a major market support for SMEs as the post Great Recession global economy continues to restructure. 

SME's must assess how QE tapering will affect their capital structure, business model and client purchasing power. It's critical for SME's to assess how these subtle changes in the market landscape will impact numerous aspects of the business.

Credit|Redi is a critical tool used by SME managers to determine financial health, assess business factors to improve profitability and demonstrate creditworthiness to lenders to fund business growth.

Download Credit|Redi on Google Play here. Get Credit|Redi
Risk: credit risk, sme, FOMC, interest rate, cost of capital, QE, Quantitative Easing, FOMC, Fed, Federal Reserve, Great Recession, Janet Yellen, Forbes

May Luck Be With You

It is said all the time.  May you have good luck in your new endeavor.  We realize its just an expression of goodwill but it does speak to the power and predominance of the notion of luck. Its as if the fates of chance and the charm of serendipity is the ultimate factor separating success from failure.  

This is absolutely the case for manufacturers of rabbit foot good luck charms, shaleigh wielding Leprechauns and other providers of magic elixirs and mojos that steer the gods of fate to your personal benefit.   But for the rest of us luck is a fickle thing whose appearance and consequence remains a riddle, wrapped in a mystery, inside an enigma.  

No question luck plays a big role in our lives.  The randomness of life can serve up pots of gold or oceans of despair due to minute measurements of time and space.  Consider missing a plane flight that crashed or consider the luck of someone who is shot in the chest and the bullet misses their heart by a few millimeters.  

These life altering random events are chalked up to the luck of the draw and we remain grateful that luck was on our side; yet remain a bit spooked had the circumstances gone the other way.

Though luck plays a factor in our lives and business careers, it is best to position oneself to be the beneficiary of luck when the angels of fortune flutter through the pathways of our life.

Alexander Hamilton said the spoils of fortune belong to the intrepid.  His sound advice counseling the need to engage calculated risk will more often than not result in some sort of achievement.

We at Sum2 believe this to be the case as well.  Our clients engage risk as a daily cost of doing business. We design risk management products for small business managers that empower them to lower the odds and consequences of damaging risk events while positioning themselves to be the beneficiaries of opportunity when the angels of luck flutter on by.

Happy St. Patrick's Day to all and may the luck of the Irish always be with you.

Generate some good luck for yourself by downloading the S3 a risk management tool for SMEs.

Get risk aware with our just released S3: SME Risk Seismograph, an early warning and opportunity discovery app on Google Play.
Get S3 on Google Play

risk: sme, random event, Black Swans, risk management

Friday, March 14, 2014

Small Firms Missing Out on Funding Opportunities

The Liverpool Echo reports today that a Lloyds Bank study of North West small firms, many SMEs are qualified for loans but problems with managing large outstanding receivables damages the company credit profile.

Lloyds' recent report on SME market segment uncovered some startling creditworthiness indicators. The report reveals:

... More than half the North West’s small firms (54%) are confident about investing for growth this year – but many are sitting on untapped assets and are owed thousands in unpaid bills…

...the average North West small company has £223,000 of assets, but is owed £56,000 in unpaid invoices…

...The UK as a whole has a total of £770bn of untapped assets in small firms – equal to 48% of the UK’s GDP – while they are owed a total of around £291bn by customers…

Lloyds believes many firms are ignoring alternative funding options to help them expand and grow. Clare Boswell, area director of Lloyds Bank Commercial Finance in the North of England, said: “Our research found that more than half of SMEs (small- to medium-sized enterprises) in the North West are more confident about investing in growth this year than they were 12 months ago.

“Despite this, SMEs are missing out on the opportunity to recruit new staff, break into new markets or develop new products because they are not harnessing the full range of funding options available that could unlock the value in their assets or invoices to help them grow.

“As a result, businesses are turning down contracts that they think they cannot afford to fund and are holding back their own growth potential.”  

SME's need to better assert convictions to move forward with growth plans and the confidence to approach lenders and capital providers to fund business growth.
Credit|Redi is a critical tool used by SME's to improve financial health and demonstrate creditworthiness to lenders and capital providers.

Get Credit|Redi on Google Play here.    Get Credit|Redi 

Risk: credit, market, opportunity, sme

Thursday, March 13, 2014

Small Business Credit Index Improves

The Experian Moody's Analytics Small Business Credit Index has posted its forth consecutive quarterly improvement.
"The Experian/Moody’s Analytics Small Business Credit Index rose 1.2 points to 117 due to the growth of small-business credit balances. According to the Q4 2013 report, the increase marked the fourth consecutive quarter of improvement in small-business credit conditions and provided the highest index reading since data tracking began in 2011.
"Credit is flowing more freely to small businesses," said Mark Zandi, chief economist at Moody’s Analytics. "With more credit, small businesses are increasingly able to expand their operations. This means more investment and jobs, and a stronger economy."
Findings from the report indicated that the growth in credit balances was due in part to financial institutions loosening credit terms for small businesses, as well as an increase in business-to-business credit transactions."
The index is a positive indication that the economic recovery from the Great Recession continues. SME's are principle drivers of economic growth.  SMEs are the leading sector in job creation and, innovation.  Each requiring access to capital to fund business growth.  
The improvement of the credit index is a positive indicator for the continued recovery of the financial health of the SME sector.  
SME's were especially hard hit during the Great Recession.  The need for capital to fund growth and access to expanded credit facilities remain a pressing concern for the SME sector.
Credit|Redi is a critical tool used by SME's to improve financial health and demonstrate creditworthiness to lenders and capital providers.
Download Credit|Redi on Google Play here. Get Credit|Redi

Risk: credit, market, financial health