san antonio veteran’s business summit 2014 presented by ron edinger october 30, 2014 working...
TRANSCRIPT
San Antonio Veteran’s Business Summit
2014
Presented by Ron EdingerOctober 30, 2014
Working Capital Optionsfor small, mid-sized, and large companies
The Squeeze on Small Business Working Capital
65.3% of small business say that the limited business lending environment is affecting their growth.
Small firms with big customers are slow to pay.
Large companies are hoarding cash, squeezing small businesses who have less access to capital.
Wall Street Journal 6/7/2012
Fixed Capital vs. Working Capital
Frac-Sand Transloading Operation
Cost to build: $14mmWorking capital: $21mm
Traditional financing for small companies
Conventional lending Personal, credit-based Selling equity Collateral (asset-based) lending
Conventional Lending Historical cash flow, credit-score based
Bank loans and Lines of CreditSBA Loans: Bank financing with an SBA
(Small Business Administration) guaranteeMicro-Lenders: e.g., (Acción, People Fund,
CRA Funds)
Personal Credit-Based Methods
Personal credit cards (61% of small businesses)
Personal loans and savingsFamily and friendsPeer to peer lendingHome equity loans
Selling EquityBased on past performance and business idea/management
Private equity funds Venture capital funds “Angel” private lenders
Today largely for companies with proprietary
technology needing >$2 million
Collateral (Asset-Based) Lending
• Home equity loans• Equipment leasing• Commercial real estate loans – e.g. SBA 504 loans• Hard money real estate lenders
(
((
Our Programs
All but cash advances built aroundaccounts receivable ..self liquidating
Two Common Situations:
1.Start up and not yet bankable
2.“Insufficiently bankable”
• Very Rapid Growth
• Seasonal Sales Pattern
Factoring
Factoring: Advancing against a Invoice
You submit an invoice to
to us.
We take out our fee send you
the balance.
Your customer pays us
We advance
70-90% of invoice amount
1
2
3
4
Factoring: The only form of financing that grows with salesDates to medieval timesVery common in Europe and CanadaAccepting credit cards is a form of factoring
Fees range from 1.8% to 5% depending on size of A/R, industry, time it takes your customers to pay
OUR APPROACH No long term contracts Simple, straightforward feesAll assets not tied upAvailable to new and established
companiesAdvances based on your customers’
likelihood of paying - not your credit history, collateral, or cash flow
Quick
Factoring’s Immediate BenefitsWe provide proof of funding allowing you to bid on very large contracts
We open up new (growth) opportunities which
pay at 45-60 days…Oil companies, Lowe’s
We provide professional credit management
NO debt (self-liquidating)
Another option for a small established business: Purchase Order Financing
Allows small companies to accept large orders when adequate trade credit is unavailable.
For finished product that is pre-sold
FLEXIBILITY, CREATIVITY UNLIMITED POSSIBILITIES
Our Programs
Like a high limit credit card: Provides funds so companies can pay suppliers for goods to be sold or retained in inventory
Preserves existing bank credit lines while: Allowing a mid-sized, credit-insurable company to take advantage of supplier discounts, large contracting and bulk purchasing opportunities, etc.
Trade Financing –doesn’t require finished products – Doesn’t disturb present bank lines
Our Programs
We purchase inventory for youWhen you sell it we factor the invoice, pay ourselves back and the rest goes proto you.
Works best for products that require little additionalprocessing e.g. produce, LED lights, frac sand
Inventory Financing
Our Programs
Our Programs
Supply Chain FinancingAn outsourced accounts payable service: Suppliers of goods and services can elect early payment on approved invoices at known cost.
Allows large (Fortune 1000) companies to standardize payment terms; enhance supplier relations; save on staff, clerical, check-writing, wire costs; perhaps share in the supplier’s discount.
In summary: Working capital - whatever your size, whatever your stage
We are financing specialists Accredited and award-winning
• No long-term contract; all inclusive fee• Flexibility; unlimited capital resources• Select those customers you want us to deal with• Family-owned and operated
2008: Banking & Finance Advocate of the Year
2010 & 2011: Regional Access to Capital Award A+ Rating
2014 Largest of 84 Liquid Capital
companies
