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Hi, All - I know it’s been a while but lots has been going on and it has kept me from blogging.

 But….I’m bbbaaaccck!

Have you ever heard the saying, “A contract (with the government) is like Money in the Bank?”atm

Have you ever tried going to the Bank with that contract to get an advance against it to help fulfill the huge contract you just landed but need to hire additional personnel and purchase additional inventory, raw material or the such?  Not quite as easy as you thought, right?

 Have you ever heard the saying something to the affect that, “the only time you can get money from the bank is when you HAVE money in the bank?”

Well, in the cash flow industry….it IS money in YOUR bank account!  Please check out this real life example I personally came across and I’ve previously posted but think it very much illustrates this and bears reviewing here:

Right after Katrina, a purchase order funder in the asset-based lending industry was able to help a NY power company fulfill a $2.2M order from the USACE. The power company’s bank was not able to process their funding request fast enough and they were about to lose the order. The purchase order funder (in Dallas) took the application on Wednesday and the order was being shipped by Friday of the same week. The power company was able to fill that order and other future ones due to the speed with which they were able to get the funding they needed.

Now if that contract shouldn’t have been a “Money in the Bank” situation I don’t know what would qualify!

I’m not bashing banks or bankers at all.  I get a lot of referrals from bankers.  What I’m saying is that this saying just isn’t necessarily true and I, for one, would like to say so here. 

The cash flow industry offers the flexibility and speed oftentimes required for special situations which just does not fit the banking business model and it defintely fills a gap in funding alternatives for small businesses – i.e. prior to the business having the financials required by banks and in conjunction with a banking relationship when flexibility and speed are called for and at other times as well.

Anyone else have any stories you can relate about this misconception?

Night…..Debra

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