Too Much Business & Personal Debt? – When Collection Agencies Call

Too Much Business & Personal Debt? – When Collection Agencies Call

By Gary Wartik

Vision Economics has been working with small businesses and their owners for many years in the effort to offer debt resolution options without using the court process.  As debt or accounts payable age on a company balance sheet or on one’s personal financial statement, and you are unable to pay what you or your business owe, your creditors will often file lawsuits in an effort to collect what they are owed.  More frequently, however, your creditors will first turn the account(s) over to a collection agency or collection law firm that gets paid a percentage of what they collect.  If  the agency does not collect from you, they in turn earn no fee for their efforts.  This often leads to the collection efforts being more aggressive than they should be.

As a result of often threatening approaches to collections in the past, Congress and the California Legislature in the last decade adopted legislation to better control how collectors act, and when they may contact you.  The changes mainly effected personal debt collection rather than collection efforts aimed at business obligations.  If you are an individual with personal debt, such as on credit and charge accounts, medical expenses and car loans, the law restricts when collection agencies may call you. Collectors must identify themselves with the name of their agency, indicate that they are calling to obtain collection and must provide their contact information if requested.  Collectors may not legally contact you before 8:00 AM or after 9:00 PM without your permission.  Generally, collectors may not contact you or anyone else at your business or at your work regarding what you owe, whether you are the business owner or an employee.  Collectors are also prohibited from threatening, misleading, harassing efforts or lying in the effort to collect from you.

In the event that you are unable to pay what you or your business owes its creditors, there are various options.  On the legal side, bankruptcy relief may be available for those who qualify by meeting what is known as the Means Test.  Assistance is also available through Vision Economics from the standpoint of working directly with creditors to reach some resolution of the debt, usually involving a settlement for appreciably less than is owned, based upon what you or your business, as the debtor, is able to pay.

If you or your business has debt issues, we have a list of excellent bankruptcy attorneys to represent you if, in our estimation, bankruptcy protection is warranted.  Vision Economics is also able to evaluate a given situation and deal with most debt issues.  Often the out of court arrangement is faster, cheaper and quieter than the legal process.  We will be able to advise you as to the best course to take based upon the facts presented, and if protection under the US Bankruptcy Code is the best approach, we can offer that direction.  The fact that much of our referrals on insolvency matters comes from attorneys reflects the recognition within the legal community that not everyone with debt issues either qualifies or otherwise belongs in a formal bankruptcy proceeding.

For further information, please give us a call at Vision Economics, 805-987-7322.

The Capital for Businesses Series # 1 – Asset Based Lending; An Overview

The Capital for Businesses Series # 1 – Asset Based Lending; An Overview
By Barry Wolfe CPA, CVA, MBA
October 19, 2013

Asset Based Lenders (“ABL Lenders”) look to tangible collateral of a business to support or collateralize their loans.  They are more flexible about a client’s cash flow and capital than traditional bank loans and will accept some losses and higher leverage than a bank.  Higher rate (non-bank) ABL lenders can even overlook some (but not all) character flaws.  ABL lenders primary focus is lending against a company’s accounts receivable and inventory; some will take equipment and real estate as additional collateral.

There are many asset classes that banks shy away from for which there are specialized ABL Lenders to meet these needs.  Examples of these are term loans on used equipment that are generally not eligible for leases, revolving lines of credit on inventories, or loans against foreign receivables.

Some ABL Lenders monitor their clients tightly like a factor does, while others only require a monthly borrowing base report. Rates can vary from just 1 percent above a bank to 2-3 percent per month for inventory-only lenders. Many smaller ABL lenders are independent, however most of the larger operations are owned by banks.

The bank-owned ABL Lenders charge lower interest rates, however they use more stringent lending criteria. Some smaller and independent ABL lenders may lend as much as 90 percent against the value of Accounts Receivable while bank-owned ABL Lenders are more likely to loan at 80 percent.  Inventory and Equipment loans have an advance rate of generally 50-80 percent of the Orderly Liquidation Value of the collateral as determined by an appraisal of the collateral by a qualified Inventory and Equipment appraiser.

For further information, please contact Vision Economics or Barry Wolfe directly at 805-217-8278.

The Slow-Growth California Economy – The View, One Economist at a Time

The Slow-Growth California Economy – The View, One Economist at a Time
Written by: Gary Wartik
Oct. 10, 2013

One of the interesting things about the study of economics outside the classroom is the differing interpretations of the economy’s performance offered by economists considering the same or similar data at the same time.  While economists may differ on key points, most agree, however that California’s economy is not where it should be five years after the deepest recession in our lifetime struck in 2008.

During the next three months we will review the thoughts of various economists as they reflect back on 2013 and offer their views of what the economy may look like during 2014. Our next review will follow a November 8 presentation in Camarillo by Dr. Bill Watkins, Director of the Center for Economic Research and Forecasting (CERF) at California Lutheran University in Thousand Oaks.

During a late September 2013 presentation in Westlake Village, CA, Dr. Mark Schniepp of the California Economic Forecast Project in Santa Barbara noted that he foresees more housing starts in California, along with retail growth and overall moderate job growth through 2014.  On housing, many business and political leaders agree that there is insufficient housing in California.  During the next decade needs of the workforce will likely be driven by organic growth and a predicted increase of in-migration. The challenge remains how to better match various housing needs with the varying growth components of the economy.

Dr. Schneipp and others have noted that the bulk of California’s current job growth outside coastal areas is occurring in agriculture, retail, unskilled manufacturing and tourism/hospitality, where wages collectively are low. This translates into the need for more apartments and semi and attached housing units, yet California is not seeing an expansion of workforce available housing construction where it is needed most, although housing starts generally are up.

We have witnessed a significant increase in California housing values during the last 12 months, due in part to an increase in demand driven by low interest rates and a partial recovery of the economy.  A good portion of the more affordable inventory of existing homes, those in the $400,000-$500,000 range and below has largely been absorbed by middle income couples, along with investment companies and speculators.  The latter have created a new dynamic in the rental housing market, driving up rental rates for condos and single family homes, and driving down the affordability rate for middle-class wage earners.  Unfortunately, affordable housing rates, according to, a housing industry tracking and placement firm, dropped during 2013 to 14 percent in San Francisco County, 23 percent in Orange County, 24 percent in Los Angeles County, 28 percent in San Diego County and 32 percent in Ventura County. The affordability rate is still a respectable 48 percent in Riverside County.

What will really drive an improved state economy is knowledge-based industries. Dr. Schneipp has noted that the job market is the result of what he describes, somewhat humorously as “demographics and microprocessors.”  He ascribes the persistent high unemployment rates to the fact that “Any job that is mundane, repetitive or codifable can be done by a robot or microprocessor,” and as such, they will be.  The result is that low wage assembly and manufacturing-related jobs, for example, are going to filled, where practical by a collection of automated robots.  These machines do not need employee benefits, work breaks, vacations, sick days or health insurance, all to the benefit of employers and at the expense of live workers.

As we assess California, Dr. Schneipp and others believe that the emerging economy will be led by the technology sector.  This sector includes investment, international trade, mobile and web development, cloud computing technology, ongoing software development, expansion of the fast-growing video gaming market; development of the next generations of software and, to some extent, biotechnology.  Largely these growth components will be found mainly in coastal California and Silicon Valley, with inland counties such as the Inland Empire and the Central Valley likely growing more lower-waged jobs.

With housing costs escalating in coastal California, only a limited number of workers will be able to afford to live close to their work.  For those without degrees or strong computer, science, math or other sought-after skills, the fight is on for a shrinking, inadequate, over-priced housing market.  Dealing with the issue is critical to the economic welfare of California in the coming years. Our colleague at Vision Economics, Russ Watson will have more to write on housing issues in the coming weeks.

In closing, if you are a community or business leader, mayor, city council member, city manager or finance director, and your community is not performing at a level to meet community expectations, please contact us about an analysis of your economic development goals.  Also consider refreshing or  writing a new economic development plan to lead you to success.  Vision Economics has the team ready to help.

Job Creation Throughout the Country Centers on Low-Paying Jobs

Job Creation Throughout the Country Centers on Low-Paying Jobs

The latest news on job creation throughout the country saw an increase of 169,000 jobs in the month of August and 168,000 more during September, which is good news, or so it would seem. A majority of the jobs that were created are from low-paying sectors such as retail, hotels, food services and drinking establishments for a total of 44,000 jobs. Compare this to the 23,000 jobs created in the professional and business services, and it’s obvious that employment growth and economic development continue to focus on the low-paying industries.

On the surface, it would seem that any job creation is good for the overall economic development plans at all levels, but reality is quite different. Take into consideration that the ratio of low-paying jobs to high-paying ones is almost 2 to 1. More people are making wages that barely pay enough to cover the bills than those who are working at making a comfortable living. This type of income inequality means that more people are going to slip into the poverty level, and will be unable to purchase goods that help support manufacturing and retail jobs and the overall economy improve. The lack of buying power among a large section of the population directly translates into a slowdown of the overall economy due to lower demand for goods beyond the barest of essentials.

The once highly touted trickle-down economic theory has largely changed due to the fact that the wealthy do not spend nearly as much as expected.  Those with higher paying jobs simply are not putting as much of their money into the economy, as a percentage based upon income as previously in order to make up the difference.  More of their money goes into investments, but as well, in the current economy, there are just fewer Americans who earn enough to be considered “wealthy.”

Are you in California and considering a business improvement district plan or a new economic development plan to strengthen your local economy? Contact Vision Economics today about creating a targeted and focused plan for your area.

Dr. Bill Watkins to lead Annual Economic Update November 8 in Camarillo, CA.

economic research


CLU CERF presents its annual
Ventura County Economic Forecast
Immigration, Economics and Opportunity:
How to Improve the Forecast

Bill Watkins, director at CLU Center for Economic Research and Forecasting
Bryan Caplan, professor of economics at George Mason University
John Krist, CEO at Farm Bureau of Ventura County

The forecast also includes a special video on
Lazer Broadcasting president, Alfredo Plasencia
and his family of immigrant entrepreneurs.

Friday, November 8, 2013
11:00 AM to 2:00 PM
(lunch included)
Serra Center
5205 Upland Road
Camarillo, CA 93012

For non-members:
Online Registration- $175
(day of the event registration- $200)
Membership information: here
Non-member registration: here

Bill Watkins

bill watkins

Bill Watkins

Bill Watkins, Ph.D., is the executive director for the CERF. Watkins had served as the executive director of UCSB’s Economic Forecast Project and as an economist with the Board of Governors of the Federal Reserve System in Washington, D.C.

He has been widely published in academic journals and is quoted regularly by news organizations throughout the world including the Wall Street Journal, New York Times and Los Angeles Times, and has appeared on Fox Business News and MSNBC on the issues of demographic trends, economic development, workforce issues, equity, and California economics.

Watkins holds a bachelor’s degree in business administration-finance from California State University, Northridge, and a master’s and doctorate in economics from University of California, Santa Barbara.

Bryan Caplan

bryan kaplanBryan Caplan is a professor of economics at George Mason University and senior scholar at the Mercatus Center. He is the author of “The Myth of the Rational Voter: Why Democracies Choose Bad Policies,” named “the best political book of the year” by the New York Times and “Selfish Reasons to Have More Kids: Why Being a Great Parent Is Less Work and More Fun Than You Think.” He blogs at EconLog, named a top economics blog by The Wall Street Journal. Caplan is currently writing a new book, “The Case Against Education.”

He has published in the New York Times, Washington Post, Wall Street Journal, American Economic Review, Economic Journal, Journal of Law and Economics, and Intelligence, and appeared on 20/20, FoxNews, and C-SPAN.

Caplan earned his bachelor’s degree in economics from the University of California, Berkeley and a Ph.D. in economics from Princeton University.

 John Krist

John Krist is the chief executive officer of the Farm Bureau of Ventura County. As CEO, he is responsible for managing the nonprofit organization’s staff, daily operations and finances. He recommends policy to the organization’s Board of Directors, implements board directives, and represents the interests of

John Krist

John Krist

the membership at legislative and regulatory hearings. He also serves as the organization’s liaison with the news media, as well as with numerous community organizations and groups.

Before joining the Farm Bureau in February 2008, Mr. Krist worked as a reporter, editor and Opinion-page columnist at the Ventura County Star for more than 24 years. The winner of numerous writing awards and journalism fellowships, he is the author of three books about California’s parks and wilderness areas, as well as “Voyage of Rediscovery,” based on his experiences retracing the Lewis and Clark trail. He also has contributed to books on urban renewal and wildfire policy. His most recent book is “Living Legacy: The Story of Ventura County Agriculture.”






California is on the way Back!

California is on the way Back!

In 2008 the heartbeat of the United States economic system stopped beating. The incident was for a short duration, and slowly the economy has gone from critical condition to fair condition.

Experts at the federal level look at the statistics for each state, adjust them where necessary for unusual events and then issue monthly reports regarding labor, productivity, and other key indicators of the economy’s health.

The economy of the United States is made up of the economies of each of the fifty states.  California’s economic recovery has been solid. Four key indicators show that growth has been steady, although at a modest rate.   The sectors that are performing well include:

  • Unemployment Rate: At 1.9 percent, California’s unemployment rate fell by more than any other state in the past year.  This was 2.5 times greater than the national average of 0.8 percent;
  • Private Sector Growth. On September 20th, 2013, Bruce Stenslie, president/CEO, Economic Development Collaborative-Ventura County said that an important feature of California’s economic recovery is that it is led by the Private Sector, not government. The jobs being added are permanent positions.  For the year ending July 31, 2013 nearly a quarter of a million non-farm payroll jobs were added, averaging 20,500 jobs each month;
  • Growth is Continuous. For 25 months California has enjoyed uninterrupted, albeit moderate economic growth;
  • Growth is Diverse: Every sector of the California economy has grown with the exception of government. This sets the state up for future tough economic times as all sectors are strong.  If one sector stumbles, the rest of the economy should not.

Is Your Business Keeping Up?

Vision Economics is a Southern California consultancy that works with California’s public sector on Economic Development.  Our public sector practice looks at every aspect of involving a business’s move to and operations in a particular area.  We then distil that information into actionable information in three areas: employee housing, Business improvement zones, and Economic Development plans. In addition to these services that we provide to the Public Sector, Vision Economics works with the private sector.

We help also private sector companies manage crises. Responding quickly to bad news about your company can be the difference between a company surviving and one that fails.  Our firm also provides strategic solutions that work in real world situations, not just on paper.

Corporate and Transactional services provided by us makes your formation in any state easier. We handle the paperwork to make sure your formation goes smoothly and we negotiate contracts and leases to your advantage.

California is ranked in the top ten states for business in the United States. Let us show you how to leverage California’s resilient economy to your company’s or community’s service.

Our name is Vision Economics and our partners are well recognized as experts in their respective fields, whether it is in the public sector or private sector.   If you want your community to flourish as a business center or have a company poised to take off, call Vision Economics at (805) 987-7322 and find out how we can help!

Some Bright Spots in Southern California’s Job Market

Some Bright Spots in Southern California’s Job Market

Written by Gary Wartik:

Improvement in the job market remains somewhat uneven, with the Anderson School of Economics at UCLA predicting statewide job growth during 2014 and 2015 at 1.9 percent and 2.2 percent, respectively.  Most students of the job market would consider such growth not sufficient to reflect a real turnaround in the job market, but rather one that only keeps up with the increase in the population at large. All of this is evidenced by the fact that California’s jobless rate is stuck at 9.8 percent, while the US rate is nearly two points less at 7.9 percent.

There are some sectors in Southern California that offer growth figures comfortably above statewide figures.  Beacon Economics in Los Angeles reported October 1 that the San Fernando Valley and areas of West Los Angles led Los Angeles County in job growth with an overall gain of 3.8 percent during the last 12 months.  Some areas of the San Fernando Valley generated job growth of 6.5 percent.  However, some parts of the state’s largest county saw areas lose jobs.  Sadly, overall county wages actually fell by a disappointing 2.3 percent.  The figures reflect that many new jobs are in sectors that historically pay less, such as hospitality/hotels, home care, office workers, unskilled manufacturing positions and retail. Construction-related jobs, which do pay well reflected one of the bright spots in the Los Angeles  County area report, driven by a reported 28 percent increase in the issuance of multi-family building permits.  As well overall construction permits are up an impressive 20 percent this year, adding $2.9 billion to the economy.

Ventura County job figures also continue to improve, according to a report by Dr. Mark Schneipp of the California Economic Forecast Project in Santa Barbara.  During the last 12 months, 5,000 non-farm jobs were created, with strong gains in health-care, leisure-hospitality and, to a lesser extent, in the professions.  As well, construction in Ventura County is offering the prospects of a turn-around as thousands of housing permits have been issued in 2013.  Construction will begin during the next twelve months, particularly in the city of Camarillo. In terms of labor market strength in California, Ventura County is second only to Orange County in creating new jobs.

In Orange County, job growth for the next twelve months is estimated by the Los Angeles Economic Development Corporation at 1.6 percent, which if predictions are correct, would drive the county’s unemployment rate down to 7.1 percent, with predictions of continued job growth sufficient to drive the unemployment rate to 6.5 percent in 2014.  Orange and Los Angeles Counties have been recognized as the manufacturing base in Southern California with some 500,000 jobs.  While many were lost during the recession, the manufacturing sector is reflecting new relative strength. Other Orange County job strengths have been noted in professional and financial services, along with many of the areas reflected in the Ventura County report.

As we note in our reports, however, what is really needed in an economy that is struggling to recover is the creation of more higher wage jobs.  Such jobs generate the ability of workers to spend in the retail and housing sectors, driving the need for more workers in manufacturing and construction. With 70 percent of the economy linked to retail spending, a stronger retail sector will continue to reflect how well the economy is doing to reach full recovery mode.  With a Los Angeles County unemployment rate lingering at 8 percent, pushing that figure down to 7 percent during the next twelve months remains a challenge that collectively faces all aspects of the public and private sectors.

Our next report will look at the job market in Northern California. In the meantime, if you are a mayor, council member, city manager or finance director, and your community is not performing where it needs to be, please contact us at 805-987-7322 about an analysis of your economic development goals.  Also consider refreshing or a writing a new economic development plan to lead to your community to success.  Vision Economics is ready to help.

Why Companies Live and Die

Why Companies Live and Die

All things in this world have a lifetime, and businesses are no exception. Some businesses grow and prosper for many decades and some never flourish, fading very quickly. What’s the difference between them? Why do some make it and others fail?

The lack of a business plan is a primary reason for most business failures.  But business failure, as opposed to success, is just the other side of the same coin. The question is whether you will be content to simply flip that coin and take your chances, or plan ahead, effectively weighting that coin so it comes up heads.

According to Small Business Administration statistics noted in Scott Shane’s book, Illusions of Entrepreneurship: The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By,  twenty-five percent of all small business start-ups fail in their first year, and more than 70% fail within ten years. So business success is clearly based on more than just a coin toss.

Business plans do not stop functioning after a business launch.  They must be referred to and updated as circumstances warrant.  There will always be factors beyond management’s control. The economic recession of 2008-11 killed off a number of businesses, but effective planning can head off many other reasons that are frequently blamed for failure. Impacts such as taxation and tough regulations can be planned for as business challenges rather than allow them to be terminal for the business.

A 2013 article in Forbes gives five reasons why businesses fail. But let’s look at the other side of that coin. Businesses succeed by doing these things well. We’ll turn it into six points:

  • Have sufficient start-up capital. There is no solid formula for this. If you plan to support your business for two years until it can support you, you are building in a two-year failure component.  Profit stems from successful planning, not from how long you can survive without profit;
  • To avoid being compared to your competition you will need a unique product or approach. You don’t need to look just like your competition;
  • You need promotion. Word of mouth is great, but you will have to have enough of those mouths out there speaking words for it to work. The key is an ongoing dialog with your customers, which takes us to the next point;
  • You need to be crystal clear in your communication of your company’s value to the customer.  Don’t be muddled and don’t be verbose. Be clear, succinct, and compelling. After all, there is something you want your customers to do, right?
  • Provide effective, professional leadership from the top. Master your weaknesses and perfect your skills. Don’t be the reason for your own company’s failure;
  • Make sure your start-up idea is a good one. Do you have a profitable business model and are the revenue streams proven? Test marketing can make the difference for you in these areas.

Located in Camarillo, California, Vision Economics serves all of California, Arizona and Nevada with both large and small business services. We will gladly answer your questions about the essentials of business success and proper business planning.   Please give us a call.

Good News for the Economy

Good News for the Economy

Written by Gary Wartik

Notwithstanding the current action, or inaction of the US House of Representatives with respect to funding the federal government, there is continuing good news in the American economy on another front.  Time will take care of the budget issues, perhaps with a bit of political blood on the floor before it is all over, but hopefully without substantial delay.

So, what is the good news?  It is no secret that America is becoming energy sufficient.  While a large part of the world’s oil and gas reserves are in “bad neighborhoods,” such as Iran and Venezuela, and in the unstable Middle East, the value and volume of recoverable oil and natural gas continues to grow in the United States as well as in Australia, Brazil, Canada and Mexico.

Shale gas in particular has made headlines as new gas fields have opened up in Arkansas, California, Louisiana, North Dakota, Oklahoma, Pennsylvania and Texas.  These fields have contributed to nearly a 90 percent decrease in the wholesale cost of natural gas as gas production has increased 20 percent during the last four years.  Annual production increases of 5.3 percent are projected by the industry through the year 2030.  As a result, heating homes and industry, and generating electricity will continue to cost less, saving Americans billions of dollars in annual energy costs.

Hunting for oil is known to be very costly, and often consumes huge volumes of energy.  While conventional oil extraction continues in coastal waters off the United States, Norway, Great Britain, Vietnam and Brazil in particular, it is oil extracted from shale rock, employing new technology that is allowing for extraction of oil thought unrecoverable less than ten years ago. With world oil selling for around $103 per barrel on October 1, extracting new oil with new technologies has become cost effective.

The oil boom in the seven states mentioned has contributed to a notable decrease in the amount of oil imported by the US. According to The Economist, new recovery methods have accounted for $238 billion in economic activity since 2009, with 1.7 million new jobs created and $62 billion in new taxes generated by state and local governments.  The benefits of cheaper natural gas and oil are noteworthy, with one estimate cited by The Economist as valued at $342 billion in projected new economic activity in the period 2015-2020 that will include generation of another 1.2 million new jobs.

One of benefits of this change in America’s expanded “Oil Patch” is that new oil should contribute to stabilizing domestic and foreign oil markets, keeping the cost of energy in check.  That scenario should contribute to lower costs to do business in the US, particularly in the manufacturing sector that hopefully will contribute to retaining and also growing the US manufacturing sector.  Absent this change, more factories would likely close with jobs exported abroad.

The second benefit is political.  America will be less vulnerable to political pressure by those who would employ tactics similar to OPEC’s 1973 and 1979 oil embargoes.  The country will also be much less impacted by prospective disruptions in the flow of oil from the Middle East during whatever crisis may be around the corner.

The current financial crisis manufactured in Congress related to funding the government will eventually be resolved.  The future of oil and gas exploration in the US is long-term, and will literally brighten America’s economic and political future.  Something to celebrate for sure.

Welcome to Vision Economics

Welcome to the new and improved website for Vision Economics.

Owner Gary Wartik began Vision Economics as a way to assist in the needs of businesses and professionals; whether the firm needs an operational or financial tune-up, is looking to expand, or sales and/or profits have dropped and  debt levels have become an issue.  The Vision Economics team can assess the options and create custom solutions for those business, or help new businesses get off the ground with expertise in business plans and Vision Economic’s excellent relationships with local banks to assist businesses in obtaining local bank or equity financing.

We also offer experience and expertise in the public sector to cities, districts and counties that would benefit from assistance in developing and implementing an economic development plan.

To learn more about our company and the plethora of services available from private to public sector needs, visit our main site at today, or give Gary a call at 805-987-7322.