SDC Financial Guide

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22 October

When you forget to pay the car insurance bill

If a bank or credit union does not have your current insurance information on file, it will send you a notice that it is buying insurance to protect its interest in the car.

Dmitry Kalinovsky, Getty Images/iStockphoto

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21 October

Why Are Financial Standards Important?

Production agricultural plays an important role in the US economy, generating $400 billion dollars annually. It is a unique industry in that there are many relatively small producers (compared to other industries) producing many different crops and livestock.

Over the years the degree of capitalization required per dollar of output has increased dramatically. Also, the complexity of financial transactions and the volatility of market prices have increased the need for good farm financial reporting.

Meanwhile, the accounting profession has provided limited help on agricultural issues.

The owners of most farm operations have limited training in finance and accounting and record systems have been designed for simplicity and ease of use. Most systems are cash-based and produce tax information and a limited amount of production data.

Both lenders and farmers can benefit from better financial recordkeeping

Today, only a small percentage of producers use double-entry records that allow easy, periodic generation of financial statements.

The primary external users of farm financial statements have been lenders, who rely on financial statements as indicators of financial position and performance. Most cash-based records are designed to create a cash-basis tax return; as a result, many non-cash transactions (inventory increase, prepaid expenses, or deferred income, for example) are never reported.

Several changes have taken place in agriculture that has increased the need for more complete and accurate farm financial information. These changes include increased volatility in farm income, increased complexity of the ownership and financial structure of farm businesses, and more stringent loan review requirements of lenders.

Lenders and others have responded to this need with many types of tools to help producers provide more complete financial information. Most of these tools simply take income and expense information provided by a tax return and combine them with balance sheet adjustments that may or may not cover the same time period as the tax return, or use valuations that are the same from the beginning to the end of the time period.

Given the diversity of production agriculture in the US and the wide variation of financial knowledge of producers, the standards set out in the Financial Guidelines for Agriculture are intended to:

1. Promote uniformity in financial reporting by presenting methods that are theoretically correct and technically sound;

2. Present standardized definitions and methods for calculating financial measures used to measure financial position and performance;

3. Identify issues to consider when benchmarking financial information.

For more information on the Farm Financial Standards Council go to the website or email Carroll Merry at

To meet with members of FFSC and boost your financial skills, attend the Farm Futures Ag Finance Boot Camp, Jan. 6, 2015, at the Hilton Ballpark Hotel St. Louis.

The opinions of Jim Kelm are not necessarily those of Farm Futures or the Penton Farm Progress Group.

Important information

21 October

Financial planning scandal threatens CBA customer service title

Commonwealth Bank of Australia is within a whisker of losing its coveted No.1 ranking for overall customer satisfaction in retail banking, with its slip in the closely watched Roy Morgan rankings coinciding with the scandal in the banks financial advice business.

CBAs overall customer satisfaction of 81.1 per cent is now just 0.1 percentage points ahead of Westpac at 81.0 per cent, according to data released by Roy Morgan on Tuesday.

CBAhas maintained a lead in the rankings since 2012. CBAs score is down by 1 percentage point over the four months to September, while Westpac is up 1.1 points.

The Roy Morgan customer satisfaction numbers are closely watched at CBA because senior managements long term incentives are tied to them.

21 October

Positively impact health by reading food labels

Our View: We encourage Sooners to learn what health terms on food labels mean, critically read labels and select healthy food products.

It’s no secret that poor eating habits and obesity are problems in the US In fact, more than one-third — 78.6 million — of adult Americans are obese and in 2012, 12.7 million of US children and adolescents were overweight or obese. With that in mind, we encourage Sooners to read food labels and seek healthy foods free of genetically modified organisms.

Taking the time to read the labels on your favorite food items can be shocking. We don’t mean just look at how many calories are in a serving size, we urge students to critically evaluate the ingredients listed on food labels as well. Food packaging can frequently be misleading, such as items that are advertised as “natural” but are actually produced with genetically engineered organisms.

However, we understand that to make informed decision about what foods to purchase based off their labels you must first have an understanding of the myriad health terms branded on food packaging. To make the process simpler, we’ve compiled a glossary of common health terms Sooners can use to gauge the healthiness of food items.

Certified Organic:

Only foods that meet the US Department of Agriculture’s Natural Organic Guidelines earn a USDA organic seal. On single-ingredient foods — like fruits, vegetables, meat and eggs — look for a small USDA organic label. Multi-ingredient foods — like snacks, drinks and processed foods — are labeled using a multitier organic classification system. Multi-ingredient foods with a “100% organic” label are made with 100 percent organic ingredients, while the word “organic” alone signifies the food product is made of 95-99 percent organic ingredients. A food product with a “made with organic ingredients” label includes 70-94 percent organic ingredients and may not display a USDA organic seal.

Certified Naturally Grown:

Foods with certified naturally grown labels are often produced by smaller local farmers who receive naturally grown certification from a nonprofit organization.

Fair Trade:

Internationally produced foods from developing countries often sport fair trade labels to signify the food producers were paid fairly and used sustainable farming practices. Fair trade items are also oftentimes organic.

Free Range:

Free range labels often appear on egg cartons or chicken. Free range labels mean the animal producing the food had free range to roam and graze and was not confined to a pen or other crowded enclosure.

Genetically Modified Organisms:

Genetically modified organisms are the product of genetic engineering, in which foreign genes are artificially inserted into a food’s genetic code. The safety of consuming genetically engineered foods is unknown and several studies show genetically engineered organisms pose serious health risks. Commonly genetically engineered foods include corn, soy, squash and canola. Currently, it is not required to label genetically modified organisms in the US, which is why we recommend seeking labeled organic alternatives to genetically engineered foods.


Natural does not signify organic. In fact, unlike organic foods, the USDA does not regulate natural products. A food labeled as natural means it does not contain preservatives or additives, but it could have been produced with conventional farming methods and genetically modified organisms.

21 October

Proof that healthiness does lead to happiness


IT HAS been with a certain amount of pride that The Herald has watched the progress of the eight people who signed up to our I Love Life programme.

When we challenged them to join the eight-week programme we hoped they would reap the rewards of a healthier lifestyle.

But their reaction to the programme has far exceeded both ours and their own expectations.

In telling their stories today, all the volunteers explain how they are not only enjoying exercise but also the rewards of making healthier lifestyle choice, such as cutting down on snack foods and drinking less alcohol.

21 October
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ECB eyes extra funding for Greek banks as Athens markets plunge

ATHENS/FRANKFURT (Reuters) – The European Central Bank will loosen its terms for accepting security from Greek banks to allow them to tap more of its funding, offering the countrys lenders support as stock and bond markets in Athens tumble.

This will provide a powerful incentive for Athens, which has toyed with the idea of quitting its financial aid program earlier than scheduled, to stay under the supervision of international lenders rather than attempt to go it alone.

Confirming an exclusive Reuters report, the ECB said it would apply a smaller discount when calculating the value of bonds that banks offer in return for ECB funding. This in effect allows lenders to tap more ECB money, despite the risks.

The decision foresees that the current haircuts are lowered, said a spokesman for the ECB, insisting that the move had not been prompted by the recent market dip.

The offer stands only as long as Greece is under an aid program, which gives the country a financial safety net but also entails strict supervision.

The current troika of inspectors made up of the ECB, the European Commission and the International Monetary Fund is deeply unpopular in Greece.

Greek stocks and bonds have tumbled as investors take fright at Athenss plan to exit its international bailout more than a year ahead early and at the threat of early Greek elections next year.

In the last two days, shares have fallen more than 12 percent and the yield on Greeces benchmark 10-year bond GR10YT=TWEB has surged above 7 percent, a level where borrowing costs are widely as seen as unsustainable.

The slide continued on Thursday, with yields topping 9 percent and stocks falling. Banks have been among the hardest hit, with the banking index of the Athens bourse .FTATBNK down almost 17 percent this week.

Finance Minister Gikas Hardouvelis played down the market jitters, which could derail Greeces early bailout exit plan.

I believe that we can make it, Hardouvelis told the Greek parliament. If we stay calm, if we are focused on our targets, if we have the widest possible political consensus, we can exit the crisis a lot faster than expected.

Those monitoring markets know that very often they are nervous, excessive in their reactions.


Fearing Greece could struggle if it were to quit its financial aid program early, the ECB made its offer on condition that Athens stay under its watch. The offer also applies to Cyprus.

Greek banks have reduced their borrowing from the ECB by 2 billion euros in the last month to 42.56 billion euros, but still depend on its funding for liquidity, which enables them to meet all their obligations.

The ECB offer, a type of reward for Greece for its reform efforts, could provide relief.

The discount to face value normally reflects the credit quality of the assets offered as collateral, in this case usually junk-rated Greek government bonds or debt guaranteed by Athens. But the ECB would be more generous.

A Greek official said the new smaller discount meant that an extra 12 billion euros of liquidity could possibly be tapped by Greek banks.

While market pressures are intensifying, the political stakes are also high. Greek Prime Minister Antonis Samaras, a conservative, is hoping an early end to the unpopular bailout will revive his political fortunes.

So far, he lacks the support needed to push through his nominee in a presidential vote in February, which would trigger early elections. Recent opinion polls show those would be won by the leftist, anti-bailout Syriza party, further unnerving international investors.

They fear that without the constraints of an aid program, Europe will have less control over government policy and Greece could squander the progress it has made in curbing its budget deficit and ending a six-year-long recession.

Athens has said that it is in talks for a precautionary credit line from European countries, which would act as a form of safety net were it to quit the current bailout at the end of the year.

Greek officials have said they hoped to be able to avoid strict conditions being attached to that backstop, but it remains to be seen whether its European partners would accept that.

(Editing by Hugh Lawson)

20 October
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Real estate group wants FAA drone exemption to market properties

Look, up in the sky. Its a bird. Its a plane. No, its a drone taking a picture of your house, your yard, your street.

Aerial photos and videos of homes listed for sale are growing more commonplace as real estate agents, videographers and hobbyists dabble in the technology of unmanned aerial vehicles. The National Association of Realtors has decided its time to formally legitimize the use of drones, as they are more commonly called, to help market a property.

20 October
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CREW DC celebrates commercial real estate achievements in Cirque du Soleil …

The ninth annual CREW DC awards kicked off Thursday evening under the big top.

With a Cirque du Soleil theme, the commercial real estate industry gathered at the Ritz-Carlton Washington, DC to celebrate the accomplishments of women in real estate as well as real estate deals from the past year.

Not wanting to leave out the men of local real estate, the event featured celebrity bartenders, like Paul Adkins from The JBG Cos., Shalom Baranes from Shalom Baranes Architects, Brandon Ernst from Lincoln Property Co. and Joe Stettinius from Cassidy Turley.

Accepting the highest individual awards for the evening were Leslie Ludwig of the JBG Cos., who received the Corporate Leadership Award, and Barbara Schaefer McDuffie of Baker Tilly Virchow Krause LLP, who won the Impact Award.

Emily Mekinc produces video and writes for the Business Journal.

20 October
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Nutritious Food Is Getting More Expensive

Equal access to healthy food is becoming more challenging each year. In the UK, for instance, carbs have remained generally affordable during the past decade. Prices for healthy, nutrient-rich fruits and vegetables, meanwhile, have noticeably risen.

(PLOS One)

According to a new study published by the journal PLOS One, a potentially dangerous disparity between the prices of healthy foods versus those that are less so may be growing. Between 2002 and 2012, starchy foods like bread, rice, and pasta were the only food group to not increase in price. Conversely, nutrient-rich fruits and vegetables experienced the greatest price hikes. In total, the average price of healthy foods in the United Kingdom increased threefold over the 10-year span when compared to less-healthy alternatives. Compounding this concern is that wage growth has been relatively flat since the Great Recession, further limiting access to proper nutrition for low-income families.

(PLOS One)

Between 2008 and 2009, according to the London School of Economics, the net weekly income for Britons fell by over 6 percent (it has since rebounded slightly and stagnated). Average hourly pay in the United States, meanwhile, has barely changed since 2000. This post-recession malaise is most often associated with long-term economic challenges, but could it also be generating greater levels of food insecurity?

The standard definition of food security is that people should have physical and economic access to sufficient, nutritionally adequate and safe food, the four-man research team writes. [M]eaning that if economic constraints are gradually forcing people to replace more-healthy foods with less-healthy foods, they are becoming increasingly exposed to the risk of food, they add.

Distinguishing certain foods, and food categories, by their relative healthiness is a challenge. The studys conclusions, however, are based on a practical formula: Foods that are scientifically proven to provide the most nutrients are most healthy. To adequately analyze inflation-adjusted price increases, the researchers relied on a handful of popular foods used in the basket of goods to determine national inflation rates. In total, 94 foods and beverages constituted their sample size. A cross-analysis was then conducted.

A limitation of this method is that relative rates of nutrition exist across certain foods. Not every tomato can be deemed healthy. Some tomatoes may be exposed to pesticides that are hazardous and eliminate their capacity to offer the body nutrition. Fish may be a healthier option than red meat, but consuming too much swordfish can raise a persons mercury level to an unhealthy state.

These findings do offer a few important reminders, however. First: Our parents were right; we need to eat our vegetables. But second, when the rise of healthy food prices outpaces income growth, people are left with an unfortunate set of options: Either stretch the budget for necessary fruits and veggies or double down on fattening (but filling) pastas.

Top Image: Concept Photo /

20 October
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Need Funding? The Challenges And Solutions To The Obstacles Of Small …

When my business partner and I launched our first Company back in 2005, we really had no idea what challenges we would face in raising the necessary capital. Entrepreneurs have many options for funding their start-ups, none of which are easy roads. More difficult now than ever before. Like many naiuml;ve entrepreneurs we started down the venture capital path, even hiring a “consultant” to help us set up meetings with firms that would ultimately try to convince us to raise more money than we needed, or tell us we didn’t need to raise any money at all. It was all quite confusing at the time.

Ultimately we decided to raise friends-and-family debt capital with very simple terms. We just needed a small bridge to get us started. Later we opened a Series A round in order to raise approximately $750,000 against what was probably an inflated valuation. The good old days!

We are now running our second company, a full-scale marketing agency, which has been recognized by the Inc. 500|5000 as one of the fastest growing private companies in the country for the last three years in a row. We borrowed money from the first business to fund this business, and then later raised $1.5 million in a Series A round. Since then we have been working on growing our line of credit. As a rapidly growing agency, we invest in new technologies and float media spends for our clients. A healthy line of credit is critical to making that happen. But growing that line has had its challenges. In this new economy we live in, small businesses face the double-edged sword of needing a bank loan to grow, but not being given one due to a lack of credit history. So how do you even get started?

I recently had the pleasure of sitting down with a colleague of mine, David Gilbert, the Founder and CEO of National Funding, a leading financial services provider for small and medium businesses. As CEO, Gilbert oversees all business operations for the company and has steered its path for successful growth over its 15 year history. In the past three years alone, National Funding’s staff and revenues have doubled under his leadership. By recognizing opportunities in the marketplace and new delivery channels, Gilbert has remained a leading voice in the dynamic alternative lending marketplace and regularly speaks at industry conferences and as an expert source in the media.

Here are the key takeaways from our interview about their company, his leadership, and the industry as a whole.

Tell me about National Funding.


National Funding is one of the country’s leading financial service providers for small and medium-sized businesses, providing working capital loans, equipment financing, merchant cash advances and credit card processing. We’re helping small businesses get fast access to short-term working capital when they have no other viable options available, and we work with them to make sure they have the right product for their business and provide counsel on a variety of financial issues.

The company believes in American small business owners, and we strive to provide fast turnaround, flexible solutions and great service to all of our customers and clients, who range in industries including: automotive, construction, excavation, manufacturing, retail, packaging, printing, restaurant, telecommunications, trucking, and waste management, among others. In 2013 and 2014, National Funding was recognized as an Inc. 500|5000 company, as well as one of San Diego’s Fastest Growing Companies, both years.

How did you first get involved in the small business and alternative lending space?


I held positions at various financial institutions where I was working with many high-revenue portfolio companies. Through that experience, coupled with my own passion to create a business, I knew that it was the American small business owner who kept America running, and I wanted to do my part in keeping Main Street thriving.

Compare the process of getting a loan through National Funding vs. through a bank. How is your business model different than the other companies in this space, and why is it important to distinguish this?


National Funding is more of a custom shop for small business loans. Our one-on-one approach is significantly different from that of a large bank. Our credit window is wider than what a bank would consider, so we see a lot of people that have been turned down there. Additionally, our process is much faster, so where a bank may take 30 days or even longer to put something together, we can do it in as little as a day. That’s not the rule, but on the other hand it’s not uncommon either. There’s also less paperwork required, which also makes it easier to do business with us.

What are you seeing in terms of loan demand right now? Has this changed over time and if so, why?


Loan demand is much higher now than we’ve ever seen before. The economy is picking up, and that means that these businesses are seeing more opportunities to take advantage of that. In turn, they’re seeking capital to expand their ventures. This could be in the form of added inventory, or expansion of their location, or maybe more advertising, and sometimes added business equipment.

What are some of the big changes taking place in the market right now and how are you adapting to them?


One of the biggest changes in the market is that small business owners are no longer looking for just a traditional loan. In addition to working capital loans, small business owners need equipment financing, merchant cash advances and credit card processing, among other things. We are sensitive to these demands and have an expanded product offering that makes us a “one stop shop” for small business owners. The other trend is one that we see in every segment – the availability of more information and functionality on-line. But curiously, though many businesses now undertake some aspect of loans on-line, the research we’ve done says that they still like and want to talk to someone who is knowledgeable about the lending products and process.

What are your top three goals for National Funding over the next 5-10 years?


In the past three years alone, National Funding’s staff and revenues have doubled. I would like to see this continue, and right now I’d say there is no reason why it shouldn’t. Based on our product offerings and excellent customer service, National Funding will continue to strengthen its position as a leader in the industry and we will find new and dynamic ways to evolve the business based on our customers’ needs.

What will be important to small business lending 5 years from now?


While there is low awareness of the alternative lending space now, in 5-10 years, I think this will be standard alternative for many small business operations. The market continues to add competitors and new forms of loan products, all of which are different from what the banking segment offers. There will always be businesses that do not meet the stricter standards of banks, and that means that companies need to have a reliable source of financing.

What drove you to want to build your own company?


After 15 years in business and finance, including work with Northwestern Mutual Life, Marcus amp; Millichap Real Estate Investment Brokerage Company and American Mortgage Capital, among others, I had gained enough experience to confidently go off on my own. This helped fuel my drive to build this company from the ground up, and has been instrumental in designing the National Funding’s entrepreneurial business model.

What has been your key driver to success?


Given my own experience as an entrepreneur, I have recognized opportunities in the marketplace and new delivery channels. I apply my personal familiarity with the space to ensure that we are utilizing every possible option.

To effectively run a company, one has to be a strategic and thoughtful leader. What do you see as the most important factor(s) to successful leadership?


I believe being collaborative and open minded are two very important traits to have as a successful leader. I like to be on the ground getting my hands dirty and being 100% involved in my company’s work. I believe in face-time with the team, and this applies to our sales team with customers, as well. We recently commissioned a survey with Northwestern University’s Kellogg School of Management’s Experiential Learning Initiative, and found that most customers show a strong preference for some form of personal interaction, and this is the focus of our sales staff at National Funding. Our customers feel reassured knowing that an actual human being is handling their needs, not a computer generated machine.

What are the things you do every day that help you achieve success personally and professionally?


I have become more confident in my own management style over the years, and as a result I am more confident of my managers. So I reach out to them every day to discuss what’s on my mind, new ideas, issues and the like, and also to hear if they are having difficulties or need decisions. I trust their decision-making abilities, and have learned to stay out of the middle of the details that they know better anyway.

I network a lot more, now, talking to others in the community and the marketplace. Being a member of YPO has opened up a lot of new ideas to me from people in other industries and other business models. And I spend a lot of time talking to successful business people in the San Diego area just to learn how they have gone about building a business.

I’ve learned to stay in shape, also, and realize the benefits it provides in decision-making. A workout can clear the mind of the peripheral problems and focuses me on key issues.