American Prudential Capital, Inc.

64th Annual Commercial Finance Association Convention Offers …PR Web (press release), WA - 14 hours agoThe Commercial Finance Association (CFA) holds its annual conference to bring together professionals involved with asset-based lending, factoring, …

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15th anniversary of Kansai / An eye on new developmentsThe Daily Yomiuri, Japan - 8 hours agoFactoring heavily in the upswing in Kansai investment are the construction of Sharp's new liquid crystal display panel factory in Sakai, Osaka Prefecture; …

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140000 SMEs To Get Financing Worth RM70 Bln This YearBernama, Malaysia - 22 minutes ago"These exclude 52 venture capital and leasing and factoring companies, small and debt resolution schemes and Credit Guarantee Corp Malaysia Bhd (CGC)," it …

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When an entrepreneur sets out to start a new business the main focus is usually the product or service to be provided. After all that is where our passion lies. As entrepreneurs, we believe in our products and services. We believe essentially in our ability to make a difference; to make things better.

Eventually, however, the focus turns to money. To make things better is going to take money. The old adage that, “it takes money to make money,” is usually true. The question is, “whose money?” Initially, entrepreneurs turn to the readily available sources, friends and family. That is, they turn to friends and family after they have exhausted their personal funds. This usually works to get the business up and running.

The first sales come in and delivery occurs. Then the orders start to grow and the success of the business seems to ride on the wave of the daily cash flow. Eventually, receipts do not match expenses in a timely manner and the entrepreneur begins to think of finding additional capital.

Then comes one of the critical points in the development of the small business, the search for third party financing. Usually the budding entrepreneur goes to the bank that has been handling his or her business accounts. Unfortunately, the business is very young without a significant track record and without much equity built up.

No matter how much the banker likes the entrepreneur and no matter how much the banker believes in the product or service, the banker will not be able to justify lending money to the entrepreneur. Bankers are not without feelings; they hate saying “no” under any circumstances. The banker wants to keep the entrepreneur’s business.

But, banks are regulated and they are regulated for good reasons. Banks lend “other people’s money.” The money that I deposit today may very well be loaned to another business tomorrow. Banks need to be very careful. So they have formulas, ratios, guidelines and rules.

If the emerging entrepreneurial business has assets like certificates of deposit, land, or stocks and bonds, the banker can usually work out a loan of equal value backed by the assets. But few entrepreneurs have such assets available to pledge to the bank. So, the banker has to turn down the loan application. Where does the entrepreneur turn then?

The enthusiastic entrepreneur usually begins to seek equity investors at this point. This has some advantages. It is available to some early stage ventures. It has disadvantages, too. The entrepreneur will most certainly lose control of the company. The equity taken at this early stage will require majority control.

Now, loss of majority control is OK if the entrepreneur and the investors have the same exit strategy. Usually, they do not. Usually, the entrepreneur is thinking long term and the early stage investor is thinking 5 years maximum. Five years passes very quickly as the entrepreneur works thorough business cycles, economic cycles, personnel cycles and ever growing competition.

The problem is that at the end of a very short period of time in the life of the business, the entrepreneur is back at square one trying to raise more money. Only this time the entrepreneur needs to raise enough money to take out the investors and ensure the survival of the business. This brings a whole new group of investors and with them new exit strategies.

Is there any other way? For some businesses, the answer is a resounding YES, THERE IS. If the business started by the entrepreneur is a business-to-business venture, in other words, if the business sells its goods and services to other businesses, then the answer is a definite YES. The entrepreneur can sell his or her completed invoices to a factor at a discount.

The advantages are many. The most important advantage is that by selling the invoices the entrepreneur gets immediate cash. No long-term debt is created, no loss of equity occurs, control does not go to a third party, no “exit strategy” issues arise, lines are easily increased, and it is self-liquidating, to mention just a few.

Entrepreneurs whose businesses engage in B2B, business-to-business, sales have the opportunity to grow their enterprises under the “Self-Sustaining Business Model” for several years, and sometimes for the life of the business. Factoring works in the entrepreneurs favor.

GMAC Commercial Finance Announces the Sale of its Poland Factoring …FOXBusiness - Jul 2, 2008CF Poland is a factoring and promissory note discounting operation based in Warsaw, Poland. The sale of CF Poland, which is expected to be completed by July …GMAC Commercial Finance sells Polish division CNNMoney.comSEB says buys GMAC unit in Poland Reutersall 23 news articles

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Redstone — ‘Ruby of the Rockies’ — on solid groundAspen Times, CO - 16 hours agoBecause Redstone is located 16 miles from Carbondale, people are feeling the pinch of high gas prices and are factoring that in to their potential purchases …

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GE Reports Second Quarter 2008 EPS of $.54; Revenues of $46.9 …FOXBusiness - 23 hours agoThis includes the effects of intercompany transactions, including GECS services for material procurement, trade receivables management and factoring; …

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Rate This ArticleFinancial Express, India - Jul 3, 2008… Commercial Services Pvt Ltd is likely to put into play the merged entity with Global Trade Finance (GTF), a leading factoring firm, within a year. …

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NEW YORK–(BUSINESS WIRE)–Fitch Ratings has assigned Banco …Business Wire (press release), CA - Jul 7, 2008They also factor in the loan and funding concentration, narrow product offering, and relatively low but improving returns. Upside potential for Bladex's …

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Zone-HDarpa's "trust in IC": a smart article and our commentsZone-H, Estonia - Jul 7, 2008Most advanced encryption schemes rely on the difficulty that computers have in factoring numbers containing hundreds of digits; discovering a 512-bit type …

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