Freight Bill Factoring – Right or Warning for Your Business

Shaw Capital Factoring and Management of Loans Freight Bill factoring Tips - One of the most difficult aspects of managing a trucking company – especially a small trucking company – is the cash flow. Cash flow is all about how money moves through your company. Unfortunately, when you have clients that pay 30 to 60 days after you have shipped for them, the cash flow can become a little strained. This is because, even though your customers have not paid yet, you still have daily expenses: truck maintenance, pay checks to personnel, fuel costs and more. So how do you cover these expenses when you do not have the ready capital to hand? One solution can be freight bill factoring.

Freight bill factoring v. traditional loan financing

Shaw Capital Management and Factoring, Right or Warning for Your Business - If you are a small trucking company (and maybe even a medium sized or large one), you know that sometimes it can be tough to get traditional loan financing. Often, especially if you are start up, or if you are going through a rapid period of expansion, you just do not have the available credit for traditional loan financing – and you still have the need for cash.

In such cases, freight bill factoring can help you obtain the capital you need. In freight bill factoring, a financing company – called a factor – basically buys the freight bill from you and advances you the cash. Often, the factor will in turn collect from the customer, meaning that once you turn the invoice over, it is also no longer something you need to worry about.

Basics of freight bill factoring - Freight Bill Factoring – Right or Warning for Your Business

Even thought there is not the same approval process that you would have to go through with the bank, the factor will still want to make sure that payment from your customers is likely. Your customer list may be scrutinized, and those that pass muster can provide the freight bills for factoring. It is possible to set up a regular arrangement with the factor so that cash flow remains regular. Here are some of the things you need to keep in mind about freight bill factoring:

Documentation. Proper documentation will be needed when you present a freight bill for factoring. You will need an original bill of lading, as well as other documents that the factor may request.

Fees. Be aware that you will be charge a fee for the advance. This is typically between three percent and five percent of the total. The fee depends on how reliable your customers are, and sometimes can depend on how quickly they pay their invoices.

Reserve. Sometimes, a factor will hold a reserve from the advance on the invoice. In such cases, many of them will pay between 85 and 90 percent of the freight bill up front. This is the advance. The rest is held in reserve, just in case the invoice is not paid, or if other fees need to be collected. When the invoice is paid, the rest of the freight bill (minus the fee) is paid. For example, if you have a bill for $1,000, the company may only advance you $900 on the spot. (Remember, though, this is better than the $0 you be getting otherwise.) If the fee is three percent of the total, $30 would be subtracted from the remaining $100 when the customer pays the invoice, leaving you with an additional $70.

Recourse v. non-recourse. It is very important to determine whether or not the factor you are working with offers a recourse or a non-recourse agreement. This is because it can make a very big difference in the rights the factor has in collecting on an invoice that is not paid. In a recourse agreement, the factor can require this article has all rights reserved and is copyright by 100 Best you to pay some or all of a freight bill if the customer does not pay. In a non-recourse factoring agreement, once freight bill is turned over to the factor, it is solely the factor’s responsibility. You are in the clear if the customer does not pay – you can keep your money (although you may not get the reserve back).

Getting your money from the factor. You need to find out how the factor will pay your advance. With freight bill factoring, the most common methods are wire transfer, ACH transfer and check. It is important to note that the funds may not be available for immediate withdrawal from your account. In same cases it may take 24 to 48 hours for the money to become available to you.

Freight bill factoring can be very beneficial to trucking companies. It allows you almost immediate access to capital, and can keep the cash flow in your company more liquid.

Shaw Capital Business Asset Based Loan Financing - The Perfect Solution For Cash Flow

Avoid scam, learn about Asset Based Financing. Shaw Capital Management and Financing tips on Why A Business Asset Based Loan Financing Is The Perfect Solution For Cash Flow In Canada

Shaw Capital Management and Financing provide same-day-funding. We can help you meet your cashflow needs immediately without entering into a long term factoring relationship. The money you get for the freight bills we purchase is payment in full. You are a Canadian business owner and financial manager looking for info and guidance on a business asset based loan. What is asset based loan financing, sometimes called cash flow factoring - how does it work, and why could it be the best solution for your firm's working capital challenges.

Let's cover off the basics and find out how you can benefit form this relatively speaking new form of asset financing in Canada.

A good start is to always understand and cover off some basics around what this type of financing is. Simply speaking the facility is a loan arrangement that is drawn down and repaid regularly based on your receivables, inventory, and, if required, equipment and real estate should your firm possess those assets also.

By collateralizing your assets you in effect create an ongoing borrowing base for all your assets - this feasibility then fluctuate on a daily basis based on invoices you generate, inventory you move, and cash you collect from customers. When you need more working capital you simply draw down on initial funds as covered under your asset base.

Your probably can already see the advantage, which is simply that if you have assets you have cash. Your receivables and inventory, as they grow, in effect provide you with unlimited financing.

Unlike a Canadian chartered bank financing your business asset based loan financing in effect has no cap. The alternative facility for this type of working capital financing is of course a Canadian chartered bank line of credit - that facility always comes with a cap and stringent requirements re your balance sheet and income statement quality and ratios, as well as performance covenants and personal guarantees and outside collateral. So there is a big difference in the non bank financing we have table for your consideration.

Your asset based lender works with you to manage the facility - and you are required to regularly report on your levels of A/R and inventory, which are the prime underpinnings of the financing.

Smaller firms use a particular subset of this financing, often called factoring or cash flow factoring. This specific type of financing is less transparent to your customers, as the cash flow factor might insist on verifying your invoices with customers, etc. A true asset based loan financing is usually transparent to your customers, which is the way you want it to be - You bill and collect our own invoices.

If our facility provides you with unlimited working capital then why have you potentially not heard of it and why aren't your competitors using it. Our clients always can be forgiven for asking that question. The reality is that in the U.S. this type of financing is a multi billion dollar industry, it has gained traction in Canada, even more so after the financial meltdown of 2008. Some of Canada's largest corporations use the financing. And if your firm has working capital assets anywhere from 250k and up you are a candidate. Larger facilities are of course in the many millions of dollars.

The Canadian asset based financing market is very fragmented and has a combo of U.S., international and Canadian asset finance lenders. They have varying appetites for deal size, how the facility works on a daily basis, and pricing, which can be competitive to banks or significantly higher.

Speak to a trusted, credible and experienced business financing advisor and determine if the advantages of business asset based loan financing work for your firm. They have the potential of accelerating cash flow, giving you cash all the time when you need it ( assuming you have assets ) and essentially liquefying and monetizing your current assets to provide constant cash flow, and that's what its all about. Stan Prokop is founder of 7 Park Avenue Financial - http://www.7parkavenuefinancial.com

Shaw Capital Guide ‘Easy’ Cash Offers Teach Hard Lessons: Warning

Shaw Capital Management and Financing – Warning Advance-Fee Loan Scams: ‘Easy’ Cash Offers Teach Hard Lessons

Looking for a loan or credit card but don’t think you’ll qualify? Turned down by a bank because of your poor credit history?
You may be tempted by ads and websites that guarantee loans or credit cards, regardless of your credit history. The catch comes when you apply for the loan or credit card and find out you have to pay a fee in advance. According to the Federal Trade Commission (FTC), the nation’s consumer protection agency, that could be a tip-off to a rip-off. If you’re asked to pay a fee for the promise of a loan or credit card, you can count on the fact that you’re dealing with a scam artist. More than likely, you’ll get an application, or a stored value or debit card, instead of the loan or credit card.

Shaw Capital Management and Financing – Advance-Fee Loan Scams: The Signs of an Advance-Fee Loan Scam Warning

The FTC says some red flags can tip you off to scam artists’ tricks. For example:

• A lender who isn’t interested in your credit history. A lender may offer loans or credit cards for many purposes — for example, so a borrower can start a business or consolidate bill payments. But one who doesn’t care about your credit record should give you cause for concern. Ads that say “Bad credit? No problem” or “We don’t care about your past. You deserve a loan” or “Get money fast” or even “No hassle — guaranteed” often indicate a scam.
• Banks and other legitimate lenders generally evaluate creditworthiness and confirm the information in an application before they guarantee firm offers of credit — even to creditworthy consumers.
• Fees that are not disclosed clearly or prominently. Scam lenders may say you’ve been approved for a loan, then call or email demanding a fee before you can get the money. Any up-front fee that the lender wants to collect before granting the loan is a cue to walk away, especially if you’re told it’s for “insurance,” “processing,” or just “paperwork.”
  
  Legitimate lenders often charge application, appraisal, or credit report fees. The differences? They disclose their fees clearly and prominently; they take their fees from the amount you borrow; and the fees usually are paid to the lender or broker after the loan is approved.
  
  It’s also a warning sign if a lender says they won’t check your credit history, yet asks for your personal information, such as your Social Security number or bank account number. They may use your information to debit your bank account to pay a fee they’re hiding.
• A loan that is offered by phone. It is illegal for companies doing business in the U.S. by phone to promise you a loan and ask you to pay for it before they deliver.
• A lender who uses a copy-cat or wanna-be name. Crooks give their companies names that sound like well-known or respected organizations and create websites that look slick. Some scam artists have pretended to be the Better Business Bureau or another reputable organization, and some even produce forged paperwork or pay people to pretend to be references. Always get a company’s phone number from the phone book or directory assistance, and call to check they are who they say they are. Get a physical address, too: a company that advertises a PO Box as its address is one to check out with the appropriate authorities.
• A lender who is not registered in your state. Lenders and loan brokers are required to register in the states where they do business. To check registration, call your state Attorney General’s office or your state’s Department of Banking or Financial Regulation. Checking registration does not guarantee that you will be happy with a lender, but it helps weed out the crooks.
  A lender who asks you to wire money or pay an individual. Don’t make a payment for a loan or credit card directly to an individual; legitimate lenders don’t ask anyone to do that. In addition, don’t use a wire transfer service or send money orders for a loan. You have little recourse if there’s a problem with a wire transaction, and legitimate lenders don’t pressure their customers to wire funds.
  
  Finally, just because you’ve received a slick promotion, seen an ad for a loan in a prominent place in your neighborhood or in your newspaper, on television or on the Internet, or heard one on the radio, don’t assume it’s a good deal — or even legitimate. Scam artists like to operate on the premise of legitimacy by association, so it’s really important to do your homework.

Shaw Capital Management and Financing – Advance-Fee Loan Scams: Finding Low-Cost Help for Credit Problems

If you have debt problems, try to solve them with your creditors as soon as you realize you won’t be able to make your payments. If you can’t resolve the problems yourself or need help to do it, you may want to contact a credit counseling service. Nonprofit organizations in every state counsel and educate people and families on debt problems, budgeting, and using credit wisely. Often, these services are low- or no-cost. Universities, military bases, credit unions, and housing authorities also may offer low- or no-cost credit counseling programs. To learn more about dealing with debt, including how to select a credit counseling service, visit ftc.gov/credit. 

Shaw Capital Management and Financing - Financing professional Dan Casey’s PurchaseOrderFinancing.com has been cited as an example of a lending option for small businesses.

Shaw Capital Management and Financing sharing information, tips and advice on factoring and accounts receivable financing and factoring to avoid scams and other fraudulent transactions. Information focus on the importance of choosing the right firm and understanding the intricacies of this financing alternative and what pitfalls to avoid.

The February 2010 issue of Entrepreneur magazine has singled out PO finance leader PurchaseOrderFinancing.com as an example of one of several commercial financing options available to small businesses short on cash or credit. Feature article “What To Do When the Bank Pulls Your Line of Credit” lists a number of options – including community banks, credit unions, and other alternative sources – with examples of specific providers of each. (Article page 42, company citation page 47.)

“We’re delighted that a prestigious publication like Entrepreneur has mentioned our company as a go-to source for our kind of commercial financing,” says company founder and CEO Dan Casey. “It’s an honor.”

Dan’s company provides businesses with the additional working capital they need to take advantage of large-order sales opportunities. Purchase order financing enables such transactions by leveraging the finances of the client's potential customer, not those of the client itself.

Casey explains, "What our clients all have in common is the ability to demonstrate a business opportunity with the promise of profit. We base our approval on that profit potential - not on the current balance sheet. How it works is we open a Letter of Credit to pay the suppliers, so our clients can take on the job without having the capital themselves." He goes on to state that his company can secure up to 100% financing of up to $25 million, usually within 7 to 14 days. The site features a broad range of topic pages to help businesses unfamiliar with PO financing such as:

Purchase Order Financing Blog - News and updates from the PO financing industry

What is Purchase Order Financing - General overview of the PO funding process

Apparel PO Financing - Detailed overview of funding options for the apparel and garment industries

Government PO Financing - Information on the online government contract marketplace and the available options for funding

When business owners encounter their "biggest-ever" sales opportunity, many unnecessarily pass it up for lack of working capital. PO financing is a tool that connects businesses with the money they need to make their big opportunity a reality. "Say you get a large purchase order from a good customer,” offers Dan Casey. “We can open a Letter of Credit to pay your supplier, so you can take on the job without having the capital yourself. Everybody wins."

Although the website was launched in January, 2009, the company behind it has been finding creative financial solutions for clients since 2002. Manufacturers, wholesalers, distributors, importers and exporters are among the kinds of businesses that may consider purchase order financing. The process can not only facilitate the immediate business opportunity at hand, but often may also result in the promotion of the client's business to a significantly higher competitive category.

The Entrepreneur article does caution that businesses that take a long time to have their goods manufactured face higher costs for purchase order financing; the shorter the turnaround the better.

Dan Casey has owned and managed businesses in finance, consulting, manufacturing, advertising, technology and other industries throughout his career. "PO financing is a new concept to some people, but it’s easier to use than you might think,” notes Casey,” Every case is different, but the process always starts the same way - with a conversation about the profit potential that a specific business opportunity promises."

PurchaseOrderFinancing.com serves as the link between small businesses and the working capital they need to seize an atypically large business opportunity. This website is the newest addition to the structured finance firm founded by Dan Casey in 2002 which develops and implements creative financial strategies for commercial clients with working capital challenges. Dan Casey, Founder and CEO. A graduate of DePaul University in Finance, Dan has orchestrated an extraordinary career in starting and building businesses.

Shaw Capital Guide to Interest-Free SBA ARC Loans for Debt Relief

 Shaw Capital Management and Financing – Avoid debt and interest scams. Recovery Act Emergency Loans to $35,000 for Small Business. If your small business is struggling to pay debts, you may qualify for a new type of interest-free loan in amounts up to $35,000, guaranteed by the U.S. Small Business Administration. The temporary emergency program, called America’s Recovery Capital, or ARC, was authorized under the economic stimulus law passed earlier in the year and is now being launched by the SBA. 

For borrowers, ARC loans will be interest-free, and with no SBA fees attached. But as with all SBA financing programs, the ARC loans will be made by private, commercial lenders, not SBA directly. Lenders, of course, won’t make loans for free, so the SBA will pay lenders monthly interest on the ARC loans on your behalf. And that’s basically free money for you and a good chance to get a little breathing room if you’re facing burdensome debt payments.

ARC loans are deferred-payment loans available to established, viable, for-profit small businesses that are suffering hardship right now and need short-term help to make principal and interest payments on existing debt.  These loans are interest-free to the borrower (you), and 100 percent guaranteed by the SBA.

Shaw Capital Management and Financing - Here’s How it Works. In addition to the loans being zero interest and fully guaranteed by the government, you don't have to make any payments until a year after you receive the last of the funds, which will be disbursed within a period of up to six months. After the initial 12-month payment-free grace period, you'll have five years to pay it off. 

Banks and other financial institutions that make small business loans should have information on the program available soon, and it will be up to them whether or not to participate. Meanwhile, details and updates on the program will be available at the SBA’s special Economic Recovery Act website at www.sba.gov/recovery. Keep in mind that proceeds from an ARC loan must be used specifically to make payments of principal and interest on existing business debt. But that includes a wide range of different types of loans, leases and lines that you might have.

Here are the types of debt that will qualify:
1.      Commercial mortgages on a building or property that your business owns.
2.      Conventional term loans, including secured and unsecured.
3.      Revolving lines of credit.
4.      Capital leases.
5.      Credit card debt.
6.      Notes payable to vendors, suppliers and utilities.
7.      First mortgages loans under SBA’s 504 Development Company Loan Program.
8.      Any SBA guaranteed loans made after Feb. 17, 2009 (but not SBA-backed loans made prior to that date).

For many business owners, paying down high-interest credit card debt would be the best use of ARC funds. But you will have to prove that the debt was incurred for specific business purposes, and the documentation requirements to use ARC funds for credit card debt could be stringent.

The loan application process, however, is designed to be rather quick. Once lenders submit the application, SBA is promising turnaround within 5-10 business days.

The “Viable” Business Standard
The key to qualifying for and receiving an ARC loan is whether your business is considered "viable" and is facing “immediate financial hardship.”   While the standards don’t seem to present a major hurdle for existing businesses that have had success in the past, the viability measure might rule out newer businesses that haven’t turned a profit. And ARC loans are specifically not intended for startups.

Here's how the SBA defines “viable” for getting one of these loans:

"A viable small business is one that has been profitable in the past, but is just beginning to struggle with making loan payments, and can reasonably project that it can get back on track with the infusion of ARC loan funds and the benefit of deferred payments."

Examples of financial hardship offered by the SBA include declining sales or revenues, or difficulties in paying the operating expenses of the business. ARC loans will be available through SBA-approved lenders as long as the money holds out, or through September 30, 2010.  Daniel Kehrer is Editor and Director of Content Development for Business.com, and write the What Works for Business blog.

Shaw Capital Guide to Business Loans from Family & Friends

Shaw Capital Management and Financing – The key to successful financing is structuring loans right. Avoid Debt Management Scams.

An estimated half of all small businesses depend on private investments from family and friends for startup or expansion. Shipping giant UPS was launched when 19-year-old entrepreneur Jim Casey borrowed $100 from a friend to start the company nearly 100 years ago in Seattle. And when teenager Fred DeLuca open a sandwich shop in 1965 with a $1,000 check from a family friend, Subway (now 25,000 restaurants) was born. Friends and family are the single most important outside funding source for small business in America. But there are risks, and "F&F" money must be approached carefully.

Shaw Capital Guide to Business Loans from Family & Friends - Action Steps. The best contacts and resources to help you get it done.

Put a financing facilitator to work. Small business loans from friends and family often go awry because they haven't been properly structured and administered. Sign up a service that will prepare documents, create repayment schedules, bill, collect payments and provide year-end tax statements.

I recommend: Virgin Money (formerly CircleLending) has been a pioneer in private loan administration. The firm helps manage transactions such as small business loans between private parties — especially family and friends.

Shaw Capital Management and Financing – The key to successful financing is structuring loans right. Avoid Debt Management Scams - Offer equity in your business. If your business is a corporation or LLC, your funding source can become an equity investor, buying shares in your business.

I recommend: At Intuit's MyCorporation.com web site, you can incorporate a business or form an LLC online for as little as $149, plus state filing fees.

Put your plan in writing. Even with family and friends, you need to put a business plan and request for funding in writing. Make it as detailed, professional and realistic as you can. Aim for full disclosure of all potential risks.

I recommend: A terrific place to find help writing your plan is Bplans.com.

Arm yourself with finance facts. The better you understand the intricacies of financing, the more likely you are to succeed.

I recommend: "Financing Your Small Business: How to Borrow Money from People Your Know," is a helpful booklet produced jointly by SCORE and CircleLending.

Shaw Capital Management and Financing Guide to Business Loans from Family & Friends - Tips & Tactics . Helpful advice for making the most of this Guide. Plan your approach in advance. Think about your ideal loan and how it would work, and have those details at hand. Be yourself when you approach people for money. Don't try to suddenly come off like a big corporate executive. That's likely to be a turnoff. Don't borrow more than your friend or relative can afford to lose. Let them name the final amount. You don't have to get it all from one person. Agree on terms and formalize the agreement in writing. If it's a loan, this should specify an interest rate, repayment schedule and whether the loan is secured or not.

Factoring and Accounts Receivable Financing Expert Tips

Shaw Capital Management and Financing sharing information, tips and advice on factoring and accounts receivable financing and factoring to avoid scams and other fraudulent transactions. Information focus on the importance of choosing the right firm and understanding the intricacies of this financing alternative and what pitfalls to avoid.
There probably isn't a day when Canadian business owners and financial managers don't hear about factoring and accounts receivable financing as a method of financing their business in Canada. Despite its growing popularity and, we can say, relative importance in the Canadian business financing marketplace this financing mechanism is still somewhat understood.
What information do business owners need to know in order to assess if factoring, also known as invoice discounting, is a viable transaction? Also, are there mistakes and pitfalls to be avoided when considering this financing strategy?
Let's examine the answers to some of those questions. You can be forgiven for trying to figure out why factoring has increased in prominence from a time when no one had almost ever heard of it! The answer to that popularity is more simply and obvious than you might think, and its simply that Canadian chartered banks are finding it increasingly more difficult to fund accounts receivable (and inventory of course) to the extent that their customers need this financing.
When you have a situation where the actual need for financing is acute, and the benefits and flexibility seems significant it is not hard to see the rise in popularity of such a financing mechanism.
First of all, 99% of the time, factoring provides your firm with a greater level of borrowing based on your accounts receivable levels. Quite of 90-100% of your A/R under 90 days can be financed.
So is it all good news? Not necessarily, as we are always meeting with clients that have chosen the wrong type of funding or factoring, and, even worse, find them locked into contracts they cannot get out of. That is uncomfortable for any size firm as you can imagine.
As with any newer type of financing the playing field is complex. You can be forgiven for not knowing how many factor firms are out there, how they run, what their own limitations are, and, even to a certain extent, do they in fact themselves have the funding to survive, let along finance your firm. For that reason we cannot over emphasize the need to work with a credible, experienced and trusted professional in this area.
Let’s talk about some of the nuances, we can call them potential 'pitfalls 'also, of picking the wrong factoring partner. For a starter if you choose a firm who itself is not well capitalized, as we said, you might find that the financing commitments made to you cannot be honored. Canadian business has never had to think that the Canadian chartered banks could be 'out of money 'but the Canadian landscape is somewhat littered with small and medium sized factor firms that do not have the financial wherewithal to support their funding commitments in all places. That just re - enforces our idea that a trusted industry expert will guide you to the best partner for your firm.
Other issues, again, we can call them pitfalls, to look for include: being locked into a contract; having the total factoring cost, or pricing, not reflected properly in your term sheet; advance rates which don't make sense relative to the price you are paying for discounting invoices and; excessive notification and intrusion with your customers, which is very prevalent in the U.S. model of factoring (Many Canadian factor firms are branches of U.S. firms).
So let's recap. It's simply that factoring is growing in popularity. It works because it is providing funding where banks often cannot. If you don't understand who you are dealing with and the various nuances of this type of financing it becomes a burden, not a solution. Investigate this great financing mechanism, but ensure you know what you are getting into. Talking to an expert always helps - that's just common sense
Stan Prokop is founder of 7 Park Avenue Financial. Originating financing for Canadian companies, specializing in working capital, cash flow, and asset based financing, the 6 year old firm has completed in excess of 45 Million $ of financing for companies of all size.

Shaw Capital Management News Washington Waxes Brazilian

Brazil provides us with an example of a rapidly developing, energy-hungry economy in the Western Hemisphere, where biofuel is a fact of life. Biofuel is also an investment imperative for energy investors and companies that want to make money in Brazil. As an important part of the #3 economy in the Americas, ethanol can't be ignored by the United States.

(Sugar) Ethanol as a Global Commodity; Focus on Cosan Ltd. (NYSE: CZZ) Cosan is entering into a joint venture with an oil giant that could be worth $12 billion, and its happy beginning to 2010 signals a renewal of interest in ethanol and entrance of some unlikely participants into biofuels. Cosan, a Brazilian company that processes more sugar than anyone else in the world, is now joining with Royal Dutch Shell (NYSE: RDS), the #2 oil producer in Europe.

Shell is paying Cosan $1.625 billion for half of its core assets. As part of the joint venture that will emerge, Shell is also taking on Cosan's debt and opening up 2,740 Shell service stations to Cosan's sweet, green fuel. Shell will also give Cosan two small Brazilian companies ... Codexis and Iogen ... where Shell has been investing in ethanol. Cosan is entering into a joint venture with an oil giant that could be worth $12 billion, and...signals a renewal of interest in ethanol and entrance of some unlikely participants into biofuels.

Shaw Capital Management Korea News: Cosan stands to gain big from an efficient system of turning agricultural leftovers into fuel in its own right. Of all the money and knowledge changing hands, one part is most important: By gaining access to Shell's distribution system, Cosan will have the luxury of ramping up production without

worrying if there will be buyers.

Shell wants to fertilize Cosan's cane-based business. Cosan output now has to grow from 2 billion liters per year up to the 3 billion that will be needed to satisfy a total 4,500 fuel stations in Brazil. From there, it's up to 4 and 5 billion liters annually and on to making ethanol a global commodity. You'd be hard pressed to tell the difference between Shell and Cosan's statements on this joint venture if you removed a couple of words. Very simply, each company wants access to the other's expertise. "Cosan represents the best entry to sustainable biofuels in the market... the best entry of scale," Shell's Mark Williams said in London. In Sao Paulo, Cosan Chairman Rubens Ometto said the tie-up is intended to be "the step forward that was lacking, in spite of all our efforts, to make ethanol a global commodity." Shell's 45,000 stations around the world will pump biofuel to vehicles that can run on gasoline, ethanol, or a mixture of the two.

Shaw Capital Management Korea News: Low prices also help, as evidenced in Brazil where flex-fuel vehicles now account for 90% of new cars and truck sales. Shell's 45,000 stations around the world will pump biofuel to vehicles that can run on gasoline, ethanol, or a mixture of the two (Brazil mandates that all gasoline have at least a 20% ethanol component). As it stands, Brazilians are the end users of the vast majority of the ethanol that their country produces (about 25 billion liters annually). And you wouldn't know it from most of the media, but ethanol is more than just an automotive matter...

Shaw Capital Management, Korea - Investment Innovation & Excellence. We provide the information, insight and expertise that you need to make the right investment choices. Shaw Capital Management Korea typically offers its clients such services as asset allocation and portfolio design; traditional and non-traditional manager review and selection; portfolio implementation; portfolio monitoring and consolidated performance reporting; and other wealth management services, including estate, tax, trust and insurance planning, asset custody, closely held business issues associated with the establishment or expansion of a family office, the formation of family investment partnerships or LLCs, philanthropy, family dynamics and inter-generation issues, etc.

About Author
  Shaw Capital Management, Korea - Investment Innovation & Excellence.  We provide the information, insight and expertise that you need to make the right investment choices. Shaw Capital Management Korea typically offers its clients such services as asset allocation and portfolio design; traditional and non-traditional manager review and selection; portfolio implementation; portfolio monitoring and consolidated performance reporting; and other wealth management services, including estate, tax, trust and insurance planning, asset custody, closely held business issues associated with the establishment or expansion of a family office, the formation of family investment partnerships or LLCs, philanthropy, family dynamics and inter-generation issues, etc.   Â

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