Factoring is a financial transaction whereby a business sells its accounts receivable (i.e., invoices ) at a discount , this is sometimes referred to as accounts receivable financing. Factoring gives a company the ability to grow without incurring debt and obtain cash flow when experiencing erratic income or sales. Factoring companies will be interested in your financial paper trail from the taking of an order to the delivery or provision of goods or services. It is important that your record keeping is well maintained and can be easily followed through to the issue of an invoice and updating of the sales ledger. Factoring companies vary in the types of businesses they will factor. Companies that haven't established credit, or have less than perfect credit. Somewhere between banks and equity funding (angel & venture capital) there are solutions to create the working capital you need to make your business vision a reality. A partial list of some factoring companies are listed below.
EQUIPMENT LEASE FINANCING
Leasing is an extremely flexible financing tool that can be structured for anything from new and used equipment or a vehicle rental or a lease to own. Lease payments can be structured around your business's projected revenues, seasonal cash flow, budget limitations, or other challenges. Leases can be structured with no payments for up to six months. A typical lease can be approved for as much as 110% of the equipment cost. This is because equipment delivery, installation and other soft costs can be included in the lease agreement. Leasing companies can approve financing within hours through minimal documentation which is a reason why many small business owners utilize leasing companies over traditional banks. Equipment Lease Financing provides you the well needed equipment without having to dip into your savings, it also allows you to maximizes your cash flow; and get a very attractive tax write-off. Have equipment that you already own? Consider leasing them back to your company and receive a lump sum payment for these equipment from and use the money for cash flow. Below are a few Equipment Leasing Companies.
VENTURE CAPITALISTS
Venture Capitalist Investors constantly compare one investment against another and ranking them in numerous categories. Having top quality documentation increases your chances of attracting an investor’s interest. These five documents are essential for obtaining financing: Executive Summary. 3 - 5 pages; Business Plan: 50 pages maximum, Due Diligence Material, including Market Studies, Research Papers, Patents, etc.
What Do VC’s Want to Know ?
How Much Can I Make ( ROI expected) ?
How Much Can I Lose (All of it plus any loan guarantees, law suits, time)?
Will This Work (Third party verification of business plan)?
Who Is In The Deal (Management, investors and their qualifications)?
How Big is the Market and How Will the Company Reach Its Clients (Verification of marketability)?
How Do I Get My Money Out and When (Exit strategy, Acquisition or Merger)?
The National Venture Capital Association (www.nvca.org), is an industry trade group based in Arlington, Virginia that maintains a database of Venture Capitalists within their organization. The database contains contact information for each VC firm and each investment professional within the member firm. They charge a subscription fee of $325 US for one year of online access.
Bad Credit Financing
Merchant Account Financing