Small Business Funding Alternatives

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HOW DID YOU LEARN ABOUT ALL THE DIFFERENT FUNDING OPTIONS AVAILABLE TO PEOPLE EVEN AFTER BANKS TURN THEM DOWN FOR A LOAN?
 
Through hours of study and a training course with the American Cash Flow Association as well as working with a Mentor for the first two years. 

And, it’s been interesting for me to learn that MBA graduates and students and others in the financial services realm you would think would be very knowledgeable about the options available in the cash flow industry for the funding needs of small businesses are not aware of these tools at all (or very little).  Or, they do not give enough import to these options (if they are aware of them) which are so desperately needed by small businesses.  The tools of the cash flow industry seem to be glossed over and not really acknowledged as the option they are. 

For instance, I met with an MBA student (Electrical engineer) who was in her last semester before getting her MBA and she happened to have a class on our funding options that semester and a homework assignment on them the same weekend we met and talked.  So, she told me, “thank you very much!” and took my literature and flyers I brought to our meeting and used to complete her homework assignment!
 
WHO ARE YOUR CLIENTS?

Almost any business that has a piece of paper to leverage.  Construction is sometimes difficult because of retainage fees but it can be done too – by companies that specialize in construction. 

Some examples, though, are:

Medical facilities of all sorts
Manufacturing
Service industries of all types – staffing agencies, trucking, fabricating, engineering, printing, import, export and the list goes on and on…
  
IN YOUR YEARS OF EXPERIENCE, WHAT OBSERVATIONS CAN YOU MAKE ABOUT SMALL BUSINESSES ON THE THRESHOLD OF GROWTH?

I would say that I have observed that oftentimes they are afraid to go for the larger clients and faster growth because of fear of the resultant cash flow issues.  But – that need not be the case! 

Now, the small business owner can do just that and know that the tools offered in the cash flow industry can assist them in accomplishing faster, more rapid growth!  It all goes back to educating and making people “aware” of the options available to them. 

But this, too, is one of the many reasons I love this business I have found!  I like being able to help people and when I can do that and myself in the process, I call that a win/win situation!

WHAT IS THE CASH FLOW INDUSTRY ALL ABOUT AND HOW CAN IT HELP?
 
In a nutshell, it’s about leveraging a businesses “liquid” assets to  self-finance it’s own growth and expansion without incurring debt or giving up equity in the business.  It looks good on the balance sheet  because it is not a “loan” per se but a “sale” of a liquid asset of the business.

The asset-based lending industry is what I call a close cousin to the cash flow industry in that it is more often an actual loan with liquid assets as collateral.
 
WHAT IS THE MOST IMPORTANT PIECE OF ADVICE YOU WOULD LIKE TO GIVE OUR LISTENERS? 
 
Well, at the risk of sounding like I’m promoting myself –  but I think if your listeners agree about cash flow being such an important issue for small business owners – my most important piece of advice would be…..
 
If you have cash flow issues and your traditional funding sources haven’t  been able to help, check with a cash flow consultant — whether that be me or some other cash flow consultant. 

And, I don’t say a funding company that does the actual funding (for example, factoring of accounts receivable), but a “cash flow consultant”, in particular, because there are soooooo many different funding niches/sources in the cash flow industry that a business owner can get lost in it  as easily as in the traditional funding arena.  The cash flow industry  is very, very niche  oriented and that is where a cash flow consultant’s expertise comes into  play — to assess the business owners needs and direct them to the  appropriate funder and save them time and effort and let them do what they  do best…..run their business without worrying about cash flow issues!

So, whether it be me or some other cash flow professional, be sure to check out the funding tools in our industry to supplement the fulfillment of your funding and cash flow needs!
 

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Hi, All -

I was recently interviewed byLinda Coughlin, the owner of Paralelles.com, and host of the radio show, One Big Life, about the alternative small business funding options I work with and I would like to share that interview with you here

There are two other interviews besides mine on the  show but I am about mid way if you wish to fast forward to it.  Let me hear back from you once you’ve listened with any questions or suggestions for future interviews!

We did not have the time to cover all the questions I had been sent as possibilities for discussion, so I thought I would take my preparatory notes for the interview and share those with you here.  I figured if Linda had these questions, you might too!

HOW DID YOU GET YOUR START?

We did cover this on the show but I will recap here too.

I got the entrepeneurial “bug” about 12 years ago when I had my first business and have been looking for something I could really enjoy for this period of time. 

I found the cash flow industry in early 2003 and started out with the plan to deal with the leveraging of owner-financed real estate notes. 

I told an associate about the “cash flow” industry though, and he gave me a hot lead for a pipe fabricating company here in Louisiana with a large contract with Bechtel Corporation and we ended up doing $3million in accounts receivable factoring for it on my very first deal in this industry! 

So, I considered the fact that real estate and I were not really getting along with a lot of number crunching and this new area seemed so much more to my tastes that I would focus instead on accounts receivable factoring, purchase order funding and contract funding.

And for those still not sure what exactly the ”cash flow industry” is about - it is about helping a business to leverage its liquid assets to self-finance its own growth, expansion and daily working capital needs, without acquiring debt or giving up equity in its company.

Factoring of accounts receivable is the most commonly used tool in the cash flow industry.

WHAT IS THE NUMBER ONE REASON FOR BUSINESS FAILURE IN THE U.S. AND WHY?

Lack of working capital!  Cash Flow!  You’ve heard the saying, “Cash is King”, right?  Well, there’s a reason it is out there!  When you’re not able to  focus on your “business” and have to worry with cf issues everything suffers.  That’s true for us in our personal lives too, I think.  What is one of the number one reasons for discord in a marriage or personal
relationship?  Money matters.

Plus, even if you have a great product or service, to be able to produce or get it out there for your customer, you have to have cash flow!

These two, plus the first question below were covered on the show.  I will break this post here and continue on into a second one for the rest of the questions and answers I had prepared for this interview.

Until next post.  Debra

(Here’s the rest of the questions to follow.)

• How did you learn about all the different funding options available to people even after banks turn them down for a loan?
• Who are your clients?
• In your years of experience, what observations can you make about small  businesses on the threshold of growth?
• What is asset-based lending all about and how can it help?
• What is the most important piece of advice you would like to give our listeners?

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This post is intended for my “personal” blog which is hosted by eblogs and seems to be down to me right now for some reason I have yet to figure out.  So, I’m posting here and will edit and transfer it to my personal blog when the server comes back up (I guess?)

There’s a wonderful article in the Advocate today entitled Honoring Organ Donors that I thought I might call to your attention.  It’s about a local (Louisiana) family’s memorable and noteworthy contributions towards this end - organ donation.  Two members of one family within one year’s time made organ donations and they are being honored in The Tournament of Roses Donate Life float, called “Life Takes Flight” and I thought I would like to honor them here too.

I’ve got the “Organ Donor” heart on my driver’s license but I have to admit the thought of what that really means scares me when I really stop and think about it but not enough to stop me from having it noted there.  I am a person who very much likes to help others which is what I feel I am doing with my business and personal life and this is just another step in that direction.

What about you?

Debra

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to help fund your small business!  And the list continues to grow as new ones are discovered as needs arise and creative entrepeneurs and investors figure out a win-win situation for both sides!

But, what “are” the 60 Cash Flow Income Streams Which Can be Sold in the Secondary/Cash Flow Market?

Well, the most commonly known are - private mortgage notes and business invoices. 

But, there are many more.

Business-Based Income Streams are comprised of cash flow streams paid to a business by another business, individual, or government and some examples are: 

Accounts Receivable

Aerospace leases
Bankruptcy Chapter 11 reorganization plans
Bankruptcy receivables
Commercial contracts
Commercial deficiency portfolios
Commercial leases
Construction receivables
Equipment leases
Equipment timeshares (or “fractional ownership interests”)
International receivables
Letters of credit
Medical receivables
Partnership agreements
Purchase orders
Sports contracts
Trade acceptance drafts
Warehouse inventory lines

Collateral-Based Cash Flow Income Streams

Aerospace notes
Automobile notes
Business notes
Collectibles notes
Equipment notes
Homeowner/condominium assessments
Marine notes
Mobile home notes
Private mortgage notes
RV, Motor home and business vehicle notes
Tax lien certificates and tax deeds

Contingency-Based Cash Flow Income Streams

Commercial judgments
Commissions
Consumer judgments
Corporate charitable contributions
Franchise fees
License fees
Royalty payments (including mineral rights fees)
Sales Revenue

Government-Based Cash Flow Income Streams

Farm contracts and conservation reserve payments
Lottery winnings
Tax refunds/credits
 

Insurance-Based Cash Flow Income Streams

Annuities
Casino winnings
Corporate retirement plans
Funeral purchase assignments
Prizes and awards
Structured settlements and class action awards
Viatical settlementsCemetery pre-need contracts
Consumer-Based Cash Flow Income Streams

Cemetery pre-need contracts
Certificates of deposit
Consumer Contracts
Credit Card charge-offs
Delinquent debt
Health and country club memberships
Inheritances
Trust advances
License impounds
Retail installment agreements
Student loans
Timeshare and vacation club memberhips

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