Syndicated Revenue Loans. Secured Lines of Credit

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "Syndicated Revenue Loans. Secured Lines of Credit"

Transcription

1 Syndicated Revenue Loans. Syndicated Revenue Loans are Revenue loans grouped together through a syndicate. Typically these loans are given while a revenue loan is still outstanding, but the business owner needs additional funds for expansion, franchising, etc. Companies that qualify must have a gross annual revenue of at least $2 million a year, and be in business for two years. Unlike revenue loans, there are typically closing costs due upon distribution of funds. Secured Lines of Credit, also known as a Revolver, are loans that are repeatedly drawn down and repaid. Usually, the loan is secured by the borrower s receivables and/or inventory, (although there are circumstances when the funder releases it secured interest). This kind of asset-based loan is designed to optimize the availability of working capital from the borrower s current assets. The minimum line of credit size is generally $100,000 with no maximum. Secured lines usually require a personal guarantee of everyone holding 20% or more of the company. Companies generally take the secured revolver alternative when they cannot obtain an unsecured bank loan which, Secured Lines of Credit cash flow, would satisfy their working capital needs. Generally, the company must have a history of profitability and positive cash flow. However, in this economic environment, hedge funds and non- bank lenders, under certain circumstances, will approve companies that suffered losses. Virtually any business to business company in almost any industry use revolvers, however they are particularly popular among retailers, wholesalers, distributors and manufacturers because these types of companies can benefit from a cost effective source of working capital, and have specific types of assets that can easily pledge as security. This product may be available to international clients depending on the country. Please call if you have a project outside the United States.) Pricing for revolvers is a function of the size of the credit facility and the credit quality of the company. This product is available to all clients of different facility sizes, however prices and terms will vary. Moderately strong credit quality companies seeking a facility from $1 million to $10 million can expect and interest rate of 8% to 12%. Companies with superior credit seeking a facility in excess of $10 million can expect an interest rate of 5% to 8%. Most other credit facility sizes can expect an interest rate starting at 12% and up. when added to their normal Page 19

2 The process is fairly simple, though not as seamless as revenue loans. The borrower grants a security interest in its receivables and /or inventory to the lender as collateral to secure the loan. This grant of security interest creates the borrowing base for the loan. As receivables are paid, the cash is turned over to the lender to pay down the loan balance. When the borrower needs additional working capital, the borrower requests another advance. Because the borrower s customers are generally not notified of the assignment of the accounts to the lender, the borrower continues to service its receivables. The borrowing arrangement is usually transparent to the borrower s customers. Most receivables are eligible. Some receivables which fall into specific categories are not. Typical examples of ineligible receivables would include receivables 90 or more days past due, and any intracompany receivables. Most non-bank lenders will lend against government and even foreign source receivables, ensuring higher loan amounts than a bank would approve. Page 20 THE INFORMATION HEREON IS THE PROPERTY OF JTB ASSOCIATES, LLC. AND/OR ITS SUBSIDIARIES. WITHOUT WRITTEN PERMISSION, ANY COPYING, TRANSMITTAL TO OTHERS, AND ANY USE EXCEPT THAT FOR WHICH IT IS The author and the publisher specifically disclaim any liability, loss or risk incurred directly or indirectly by the use and application of any information presented in this book. Specific information contained herein is time related and can change without notice. No guarantee is made or implied regarding the accuracy of this information other than at the time of publication. Furthermore, the author acts as a publishing company only and does not provide any personal credit services, All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means without permission in writing from the author or publisher, except that forms may be reproduced by the purchaser for his or her own

3 Page 21

4 Page 22 chan without notice. No guarantee is made or implied regarding the accuracy of this information other than at the time of publicat publication. ion. Furthermore, the author acts as a publishing company only and does not provide any personal credit services, including presss portion of the first amendment to the constitution of the united States of America. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means without permission in writing from the author or publisher, except cept that forms may be reproduced by the purchaser for his or her own

5 Senior Term Loans Senior Term Loans or Subordinated Debt is a type of debt financing cash flow loan, in which the lender funds, generally for working capital, using the expected cash flows that a borrowing company generates as collateral for the loan. Typically these loans are used to for funding growth or financing an acquisition. Our lenders can provide Cash Flow Loans with the following parameters; Loan is typically 2 to 3 times Earnings Before Interest Tax Depreciation and Amortization; (EBITDA) Clients can be in virtually any industry. Generally, they must have been in business at least three years and have a strong history of profitability and cash flow together with a strong balance sheet. But again, in this economic environment, non-bank lenders are considering companies with losses as well. A cash flow loan is also a common business tool used by companies that experience consistent shifts in revenue generation, based on seasonal sales. The cost of capital is based on the credit quality of the company, but generally these loans will be somewhat than an asset based revolver, the loan previous discussed. Rates are typically 12% - 15% (sometimes with an equity kicker). Minimum is $5 million, (other sizes considered on a case by case basis. Preferred industries include energy, healthcare, communications, but we will look at others. To secure repayment, the lender requires covenants from a borrower that the business will maintain those expected cash flows and other ratios such as enterprise value, EBITDA, total interest coverage ratio, total debt/ebitda and so on. They will also take a lien covering the assets of the business to provide the lender with the ability to take control in the event of default. Page 23

6 Page 24

7 Accounts Receivable Factoring Accounts Receivable Factoring, in contrast to a revolver, factoring means the accounts receivable are actually sold to a factoring company for cash. Depending on the credit quality of its customer and the concentration of the customer s base, the company will receive 75% to 90% of the invoices face value within a day or two of sending the invoice. Once the factor collects, the company receives the remainder back minus fees and interest rates. The minimum line of credit is $50,000, and usually requires a personal guarantee of everyone holding 20%or more of the company. This product may be available to international clients, depending on the country. (please call if you have a project outside the Unites States). qualifies them for less expensive capital such as a revolver or an unsecured bank line. Clients can be virtually any industry. Pricing ranges from 1% per month for high credit quality customers, (such as the U.S. Government or AA/AAA rated corporations) to 3.5% per month for more challenged customers. Costs can be mitigated by using a daily rate. (i.e., 1% divided by days in the month to get the daily rate) and paying off the line as soon as the funding becomes available. Cost savings are significant, especially when electronic banking methods are incorporated. When a company manages cash flow in this way, factoring can be more cost effective. Factoring is typically used by business to business companies with less-than-perfect credit, (i.e. liens, bankruptcy) in transition, or possibly in a start up mode. Interest rates and fees on these types of loans are generally higher than revolvers. Accounts Receivable factoring is often an month bridge financing vehicle which allows a company to grow to consistent profitability which in turn Factoring can be either with or without recourse. In the case of non recourse factoring, the factor assumes the credit risk for the company s outstanding invoices. This is usually more expensive than recourse factoring, where the company would be required to repurchase any invoice that has not paid within 90 days. Unlike the revolver, where the company receives payments directly from is customer, the customer is now required to send the payment to the lender s bank ( lock box ). The lender controls the funds to ensure repayment of the debt Page 25

8 Purchase Order Financing Purchase Order ( PO ) Finance is an ideal financing option for resellers or distributors of hard goods that lack the funds to pay their manufacturers. This financing structure is also available to manufacturers of products that need to purchase raw material to begin the process of fulfilling a purchase order. This is referred to as work-in-process or ( WIP ) financing. Because the lender, in this structure, bears the additional risk of the manufacturer not finishing the manufacturing process, WIP credit facilities are only provided by a few lenders and are more challenging to obtain. PO financing can provide virtually unlimited growth capital for businesses, because it relies largely on the credit quality of the company issuing the Purchase Order. Although PO financing is a great tool for companies in high growth mode, it does not work for every company. PO financing works best if you have gross margins of at least 25% and good paying customers, a relatively short cycle from the PO date to delivery of the product (no greater than 90 days). It is a perfect product for marketing and distribution companies that use a third party manufacturer and drop ships to very high credit quality customers. PO financing is typically priced on a 30-day basis. The rate can range from 2.5% to 3.5% depending on the size of the facility, the financial condition of the company and whether it is finished goods or WIP financing. It is common to combine PO financing with receivables factoring. Because PO financing is usually more expensive than factoring, this tends to reduce the total cost of the transaction. When the invoice is factored the PO funding is paid off. Moreover, it improves cash flow since the advance rate for an invoice is greater than the advance rate for a purchase order. The minimum loan size is $50,000 with no maximum. Usually requires a personal guarantee of everyone holding 20% or more of the company. Available to the U.S based companies, although the suppliers may be anywhere in the world. PO financing is simple to use. The lender buys the products or raw materials from the company s suppliers (overseas or domestic), in the company s name, using a letter of credit. Then, it ensures that the products are properly delivered to the company. Once the order is delivered and approved by the company, the funds from the letter of credit are released to the supplier. At this point, the order has been delivered and an invoice is issued to the client s customer. Page 26

9 PO financing transactions usually have 8 steps: 1. Purchase order is issued to and accepted by the company. 2. The company orders the goods or raw materials from the supplier 3. The lender pays the company s suppliers via a bank wire or letter of credit (usually 100% of the cost) to get the product produced or the materials delivered 4. The product is delivered to the company s customer, who accepts it 5. The company s customer is invoiced 6. The Invoice is factored which pays off the PO financing and increases the company s working capital in an amount equal to the difference between the advance rates. (PO financing pays 100% of cost of goods, while AR factoring pays up to 90% of the invoiced sale price) 7. The company s customer pays the invoice(usually in 30 to 60 days 8. The lender settles with the company. The inventory funding product finances the raw materials and /or the finished goods held for sale by a company. Although inventory can be financed on a standalone basis, it is more often combined with accounts receivable financing. Generally, lenders will advance 50% of the cost of the inventory. If combined with an accounts receivable line of credit, the amount of inventory financed is typically between 35% and 50% of the receivable financing. Usually, a personal guarantee is required of everyone holding 20% or more of the company. Clients can be in virtually any industry. They are either manufacturers or distributors of products manufactured by a third party. Pricing ranges from 2.5% to 3.5% per 30 days and may require the payment of a commitment fee. The lender will use an appraiser to determine the orderly liquidation value of the inventory and will required weekly reporting on changes in the amount of inventory held by the company. Periodic, physical inspection will also take place. The lender will required that all the company s sales proceeds be redirected to a new bank account controlled by the lender ( lock box ). The lender controls the funds to ensure repayment of debt. Page 27 THE INFORMATION HEREON IS THE PROPERTY OF JTB ASSOCIATES, LLC. AND/OR ITS SUBSIDIARIES. WITHOUT WRITTEN PERMISSION, ANY COPYING, TRANSMITTAL TO OTHERS, AND ANY USE EXCEPT THAT FOR WHICH IT IS The author and the publisher specifically disclaim any liability, loss or risk incurred directly or indirectly by the use and application of any information presented in this book. Specific information contained herein is time related and can change without notice. No guarantee is made or implied regarding the accuracy of this information other than at the time of publication. Furthermore, the author acts as a publishing company only and does not provide any personal credit services, All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means without permission in writing from the author or publisher, except that forms may be reproduced by the purchaser for his or her own

10 Equipment Leasing/Lease-Back Equipment leasing can be used to purchase new or used equipment for a business. It can also be used to generate working capital through a sales leaseback of equipment already owned by a company. It is available to companies across the credit spectrum. Lenders will generally lend 70% of the rapid liquidation value of the equipment which is usually substantially below retail value. For companies with less than perfect credit additionally collateral will be required. In the case of a borrower with very poor credit, up to 2.5% times the amount of the lease may be required as additional collateral. Although most types of equipment are eligible, heavy equipment ( yellow iron ) holds its value well and therefore is better suited to leasing than restaurant equipment or other equipment with softer values. The term off the lease varies with the type of equipment, but is generally from 3 to 7 years. The minimum size is $50,000 with no maximum, and leases are available to U.S. based companies. Any company that uses a significant amount of equipment in conducting its business will find leasing beneficial. It is especially useful for the construction, manufacturing, medical and trucking industries; Industries that typically have equipment that retain value. tend to value it at what is known as forced liquidation value, a very low price based on what it would go for at an auction. Equipment lease backs can create tax burdens in this scenario. If an equipment piece is worth $500,000, but on the books at historical cost, $100,000, the owner will have to pay tax on the gain if it is ever sold. (Although this can be mitigated by doing a like-kind exchange, consult your tax advisor). The effective interest rates vary wildly based on the credit of the lessee. Strong credit quality with good collateral value will be in the high single digits, while the toughest credits can expect rates as high as 25% to 30%. Again, similar to the Revenue Loan, it is important to remember, that even high priced financing often is what is needed to propel a company into greater profitability. Greater profitability leads to less expensive capital in the future. The lessor purchases the equipment and leases it to the client. For operating leases (off balance sheet), the buyout at the end of the lease if Fair Market Value. For capital leases (on balance sheet), the buyout is $1.00. Equipment lease back s in addition to interest rate, may incur other costs under different scenarios. If equipment is leased that has depreciated, lenders Leasing is a complicated subject. If you intend to focus on this product, we would suggest getting a good book on equipment leasing. Page 28

A fresh perspective on Asset Based Lending (ABL)

A fresh perspective on Asset Based Lending (ABL) A fresh perspective on Asset Based Lending (ABL) While asset-based lending may often be considered last-resort funding, commercial borrowers of all types and sizes are using this flexible, cost-effective

More information

Ratio Analysis. A) Liquidity Ratio : - 1) Current ratio = Current asset Current Liability

Ratio Analysis. A) Liquidity Ratio : - 1) Current ratio = Current asset Current Liability A) Liquidity Ratio : - Ratio Analysis 1) Current ratio = Current asset Current Liability 2) Quick ratio or Acid Test ratio = Quick Asset Quick liability Quick Asset = Current Asset Stock Quick Liability

More information

gyb Growing your business TM

gyb Growing your business TM Private Company Services gyb Growing your business TM Volume 62 2010 Financing the future: Strategies for accessing capital Companies that want to grow, whether organically or by acquisition, need capital.

More information

Use this section to learn more about business loans and specific financial products that might be right for your company.

Use this section to learn more about business loans and specific financial products that might be right for your company. Types of Financing Use this section to learn more about business loans and specific financial products that might be right for your company. Revolving Line Of Credit Revolving lines of credit are the most

More information

Overview of Financial Solutions

Overview of Financial Solutions Overview of Financial Solutions The Etra Advisory Group provides solutions to businesses for growth, expansion, cash flow, refinance and acquisition. We cover the world of business financing that banks

More information

From PLI s Course Handbook Private Equity Acquisition Financing Summit 2006 #10725. Get 40% off this title right now by clicking here.

From PLI s Course Handbook Private Equity Acquisition Financing Summit 2006 #10725. Get 40% off this title right now by clicking here. From PLI s Course Handbook Private Equity Acquisition Financing Summit 2006 #10725 Get 40% off this title right now by clicking here. 2 ASSET-BASED FINANCINGS FOR ACQUISITIONS COUNTING ON YOUR ASSETS Seth

More information

Flashcards for Chapter 6 Introduction to Working Capital Management [ ]

Flashcards for Chapter 6 Introduction to Working Capital Management [ ] Flashcards for Chapter 6 Introduction to Working Capital Management [ ] [Type the abstract of the document here. The abstract is typically a short summary of the contents of the document. Type the abstract

More information

So You Want to Borrow Money to Start a Business?

So You Want to Borrow Money to Start a Business? So You Want to Borrow Money to Start a Business? M any small business owners cannot understand why a lending institution would refuse to lend them money. Others have no trouble getting money, but they

More information

Sankaty Advisors, LLC

Sankaty Advisors, LLC Middle Market Overview March 2013 Overview of Middle Market We view the middle market as having three distinct segments, defined by a company's ownership type, prospects, and access to capital. Companies

More information

Ipx!up!hfu!uif Dsfeju!zpv!Eftfswf

Ipx!up!hfu!uif Dsfeju!zpv!Eftfswf Ipx!up!hfu!uif Dsfeju!zpv!Eftfswf Credit is the lifeblood of South Louisiana business, especially for the smaller firm. It helps the small business owner get started, obtain equipment, build inventory,

More information

11.437 Financing Community Economic Development Class 6: Fixed Asset Financing

11.437 Financing Community Economic Development Class 6: Fixed Asset Financing 11.437 Financing Community Economic Development Class 6: Fixed Asset Financing I. Purpose of asset financing Fixed asset financing refers to the financing for real estate and equipment needs of a business.

More information

RATIO ANALYSIS FORMULAS + THEORIES

RATIO ANALYSIS FORMULAS + THEORIES A) Cash Position Ratio : - 1) Absolute Cash Ratio = Cash Reservoir Current Liabilities 2) Cash Position to Total asset Ratio = Cash Reservoir * 100 (Measure liquid layer of assets) Total Assets 3) Interval

More information

THE ABC S OF BORROWING

THE ABC S OF BORROWING THE ABC S OF BORROWING All businesses, no matter what size, need to raise money at some time. Small business owners may be able to dip into their personal savings or borrow money from friends. More likely,

More information

RISK ASSESSMENT FOR SMALL BUSINESS. Terry S. Campbell, Community Development Officer Department of Development & Technology

RISK ASSESSMENT FOR SMALL BUSINESS. Terry S. Campbell, Community Development Officer Department of Development & Technology RISK ASSESSMENT FOR SMALL BUSINESS Terry S. Campbell, Community Development Officer Department of Development & Technology Date: March 25, 2004 1 Counseling Tool Outline - Cover Page - Outline - Introduction

More information

NOTE ON LOAN CAPITAL MARKETS

NOTE ON LOAN CAPITAL MARKETS The structure and use of loan products Most businesses use one or more loan products. A company may have a syndicated loan, backstop, line of credit, standby letter of credit, bridge loan, mortgage, or

More information

EQUIPMENT LIQUIDATIONS: The Second in a Three Part Series Focusing on Liquidations of Accounts Receivable, Inventory and Machinery & Equipment

EQUIPMENT LIQUIDATIONS: The Second in a Three Part Series Focusing on Liquidations of Accounts Receivable, Inventory and Machinery & Equipment EQUIPMENT LIQUIDATIONS: The Second in a Three Part Series Focusing on Liquidations of Accounts Receivable, Inventory and Machinery & Equipment Liquidating Machinery & Equipment Some General Guidelines

More information

Director s Guide to Credit

Director s Guide to Credit Federal Reserve Bank of Atlanta Director s Guide to Credit This guide was created by the Supervision and Regulation Division of the Federal Reserve Bank of Atlanta, 1000 Peachtree Street NE, Atlanta,

More information

3. Seasonal or cyclical working capital to finance the temporary cash shortfalls due to the nature of the firm s normal business cycle.

3. Seasonal or cyclical working capital to finance the temporary cash shortfalls due to the nature of the firm s normal business cycle. 11.437 Financing Community Economic Development Class 5: Working Capital Financing I. Three different meanings of term working capital 1. Excess of current assets over current liabilities 2. Firm's investment

More information

Short Term Loans and Lines of Credit

Short Term Loans and Lines of Credit Short Term Loans and Lines of Credit Disadvantaged Business Enterprise (DBE) Supportive Services Program The contents of this training course reflect the views of the author who is responsible for the

More information

LOAN APPLICATION. Name of Business (Legal Name): Address: City, State, Zip: Business Phone: Federal Tax ID #:

LOAN APPLICATION. Name of Business (Legal Name): Address: City, State, Zip: Business Phone: Federal Tax ID #: LOAN APPLICATION Name of Business (Legal Name): Business Phone: Federal Tax ID #: Fax: Principals Name: Phone: Social Security #: Type of Business Sole Proprietorship Corporation Partnership Date Established

More information

Federal Reserve Bank of Atlanta. A Guide for Specialized Credit Activities

Federal Reserve Bank of Atlanta. A Guide for Specialized Credit Activities Federal Reserve Bank of Atlanta A Guide for Specialized Credit Activities CONSUMER LENDING According to the Federal Reserve Board of Governors, seasonally adjusted consumer credit outstanding including

More information

Apple Capital Group, Inc.

Apple Capital Group, Inc. COMMERCIAL FINANCE Commercial finance typical revolves around what are considered the assets of your business and are often called "asset based loans". The assets of your business are things such as your

More information

Guide to Sources of Financing for Companies

Guide to Sources of Financing for Companies Guide to Sources of Financing for Companies By John A. Leonard Director, Fairfield and Woods, P.C. Below is a short guide to sources of financing for companies. Twenty-two sources of financing are listed,

More information

A Guide to Asset-Based Lending

A Guide to Asset-Based Lending Bank of America Merrill Lynch Article June 2014 A Guide to Asset-Based Lending Businesses with increased liquidity and working capital needs may find an asset-based loan (ABL) to be an attractive alternative

More information

Accounts Payable Accounts Receivable Amortization Annual Interest Rate Annual Percentage Rate Attorney Fees Bridge Financing

Accounts Payable Accounts Receivable Amortization Annual Interest Rate Annual Percentage Rate Attorney Fees Bridge Financing Accounts Payable Accounts payable are business debts that must be paid off within a relatively short period of time, as opposed to long term debt such as mortgage loans and equipment loans. Accounts payable

More information

Your Bank Is Not Your Only Source for Capital. AccuPay Webinar Series

Your Bank Is Not Your Only Source for Capital. AccuPay Webinar Series Your Bank Is Not Your Only Source for Capital AccuPay Webinar Series The World of Business Finance After 2008: Bank regulation cash reserves Money to lend? What are my options? What Are Your Needs? Leasing

More information

It is concerned with decisions relating to current assets and current liabilities

It is concerned with decisions relating to current assets and current liabilities It is concerned with decisions relating to current assets and current liabilities Best Buy Co, NA s largest consumer electronics retailer, has performed extremely well over the past decade. Its stock sold

More information

5N PLUS INC. Condensed Interim Consolidated Financial Statements (Unaudited) For the three month periods ended March 31, 2016 and 2015 (in thousands

5N PLUS INC. Condensed Interim Consolidated Financial Statements (Unaudited) For the three month periods ended March 31, 2016 and 2015 (in thousands Condensed Interim Consolidated Financial Statements (Unaudited) (in thousands of United States dollars) Condensed Interim Consolidated Statements of Financial Position (in thousands of United States dollars)

More information

RECEIVABLES FINANCING

RECEIVABLES FINANCING RECEIVABLES FINANCING Asset-Based Financing Strategies 2015 Practising Law Institute February 27, 2015 Scott A.Lessne Crowell & Moring LLP I. The Role of Receivables in Asset- Based Lending A. What are

More information

Vermont Employee Ownership Center. Sixth Annual Employee Ownership Conference. Financing an ESOP. Burlington, VT June 6, 2008

Vermont Employee Ownership Center. Sixth Annual Employee Ownership Conference. Financing an ESOP. Burlington, VT June 6, 2008 Vermont Employee Ownership Center Sixth Annual Employee Ownership Conference Financing an ESOP Burlington, VT June 6, 2008 Copyright 2008 by SES Advisors, Inc. All rights reserved. Program Agenda Basic

More information

Plan and Track Your Finances

Plan and Track Your Finances Plan and Track Your Finances 9.1 Financing Your Business 9.2 Pro Forma Financial Statements 9.3 Recordkeeping for Businesses Lesson 9.1 Financing Your Business Goals Estimate your startup costs and personal

More information

The Corporate Finance Shift to Asset- Based Loans PART I

The Corporate Finance Shift to Asset- Based Loans PART I The Corporate Finance Shift to Asset- Based Loans PART I Realistic Business Owners Look Beyond Bank Cash Flow Loans 1 Brian Ballo Corporate Finance Associates The Good News 1 Financing is currently available

More information

Chapter Sources of Short-Term Financing

Chapter Sources of Short-Term Financing Chapter Sources of Short-Term Financing Chapter 8 - Outline PPT 8-2 Sources of Short-Term Financing Trade Credit from Suppliers Net Credit Position Chartered Banks in Canada Types of Short-term Loans Interest

More information

Frequently Asked Questions about Asset-Based Lending

Frequently Asked Questions about Asset-Based Lending APRIL 2011 Frequently Asked Questions about Asset-Based Lending Table of Contents What are asset-based loans?... 2 What about credit ratings?..... 2 How does it differ from other types of corporate lending?.....

More information

Financial Statements and Ratios: Notes

Financial Statements and Ratios: Notes Financial Statements and Ratios: Notes 1. Uses of the income statement for evaluation Investors use the income statement to help judge their return on investment and creditors (lenders) use it to help

More information

Consolidated Statement of Profit or Loss (in million Euro)

Consolidated Statement of Profit or Loss (in million Euro) Consolidated Statement of Profit or Loss (in million Euro) FY 2014 FY 2015 % change Q4 2014 Q4 2015 % change un Revenue 2,620 2,646 1.0% 711 672-5.5% Cost of sales (1,813) (1,804) -0.5% (489) (464) -5.1%

More information

WHAT IS BUSINESS CREDIT?

WHAT IS BUSINESS CREDIT? 1 WHAT IS BUSINESS CREDIT? Why Do I Need Credit? Establishing a good credit rating is an important financial priority for every business. Having good business credit means that owners of businesses can

More information

Analyzing Cash Flows. April 2013

Analyzing Cash Flows. April 2013 Analyzing Cash Flows April 2013 Overview Introductions Importance of cash flow in underwriting decisions Key attributes to calculating cash flow Where to obtain information to calculate cash flows Considerations

More information

Commercial and Industrial Lending

Commercial and Industrial Lending Commercial and Industrial Lending A CPA Perspective April 2014 Overview Introductions and Goals of Presentation Commercial and Industrial Lending: Brief Background Covenants, Advance Rates, and Borrowing

More information

Key Points to Borrowing Money

Key Points to Borrowing Money Key Points to Borrowing Money Borrowing money is one of the most common sources of funding for a small business, but obtaining a loan isn't always easy. Before you approach your banker for a loan, it is

More information

Accounts Receivable and Inventory Financing

Accounts Receivable and Inventory Financing Accounts Receivable and Inventory Financing Glossary Accounts Payable - A current liability representing the amount owed by an individual or a business to a creditor for merchandise or services purchased

More information

Chapters 3-4 Financial Statements, Cash Flow, and Analysis of Financial Statements. Balance Sheet. Total Liabilities and Shareholder s Equity

Chapters 3-4 Financial Statements, Cash Flow, and Analysis of Financial Statements. Balance Sheet. Total Liabilities and Shareholder s Equity Chapters 3-4 Financial Statements, Cash Flow, and Analysis of Financial Statements Balance Sheet Assets Cash Inventory Accounts Receivable Property Plant Equipment Liabilities and Shareholder s Equity

More information

Agenda. Traditional Financing

Agenda. Traditional Financing Traditional Financing This session explores the traditional financing options that are available to allow you to build value in your business while you prepare for your exit 1 Agenda Benefits of Debt Types

More information

ICAP GROUP S.A. FINANCIAL RATIOS EXPLANATION

ICAP GROUP S.A. FINANCIAL RATIOS EXPLANATION ICAP GROUP S.A. FINANCIAL RATIOS EXPLANATION OCTOBER 2006 Table of Contents 1. INTRODUCTION... 3 2. FINANCIAL RATIOS FOR COMPANIES (INDUSTRY - COMMERCE - SERVICES) 4 2.1 Profitability Ratios...4 2.2 Viability

More information

Plan and Track Your Finances

Plan and Track Your Finances Chapter 9 Plan and Track Your Finances 9.1 Finance Your Business 9.2 Pro Forma Financial Statements 9.3 Record Keeping for Businesses Ideas in Action Electronic Safekeeping Katelin Shea addressed the unmet

More information

Leasing Versus The Rest

Leasing Versus The Rest Leasing Versus The Rest The following pages highlight: - Leasing Versus Cash - Cash & Impact on Borrowing - Leasing Versus Loans - Leasing Versus a Line of Credit 1 Lease Versus Cash Time Value of Money:

More information

How Do I Qualify for a loan?

How Do I Qualify for a loan? How Do I Qualify for a loan? Borrowing money is one of the most common sources of funding for a small business, but obtaining a loan isn't always easy. Before you approach your banker for a loan, it is

More information

HARMONIC DRIVE SYSTEMS INC. AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2013

HARMONIC DRIVE SYSTEMS INC. AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2013 HARMONIC DRIVE SYSTEMS INC. AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2013 HARMONIC DRIVE SYSTEMS INC. AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS

More information

Borrowing 101. Resources. Are you ready to Borrow?

Borrowing 101. Resources. Are you ready to Borrow? Borrowing 101 The BDC wants your business to succeed and in turn pay the BDC back. Our programs are revolving loan funds that require loans to be repaid so that we can lend our dollars to other businesses

More information

E2-2: Identifying Financing, Investing and Operating Transactions?

E2-2: Identifying Financing, Investing and Operating Transactions? E2-2: Identifying Financing, Investing and Operating Transactions? Listed below are eight transactions. In each case, identify whether the transaction is an example of financing, investing or operating

More information

Working with your banker

Working with your banker Working with your banker Business CoaCH series How the system works What your bank expects of you How to maintain a banker-friendly relationship Business Coach series Getting support when you need it The

More information

FundingEdge / Power2Fund

FundingEdge / Power2Fund Factoring Defined In the world of finance, factoring is a transaction in which a business sells its account receivables to a third party--called a "factor"--in return for immediate cash, generally working

More information

CDA BLF LOAN APPLICATION

CDA BLF LOAN APPLICATION CDA BLF LOAN APPLICATION Name of of Business (Legal Name): Address: City, State, Zip: Business Phone // Fax: Federal Tax ID#: Principals Principal 1 Principal 2 Name: Address: City, State, Zip: Phone:

More information

RENAISSANCE ENTREPRENEURSHIP CENTER First Finance Class (FIN-1)

RENAISSANCE ENTREPRENEURSHIP CENTER First Finance Class (FIN-1) Finance 1 (FIN-1) RENAISSANCE ENTREPRENEURSHIP CENTER (FIN-1) Learning Outcomes At the conclusion of this class, you should: Know what will be covered in the six finance class sessions. Have reviewed some

More information

Class #16 Ratio Analysis & Bankruptcy Detection Class #16 1

Class #16 Ratio Analysis & Bankruptcy Detection Class #16 1 Class #16 Ratio Analysis & Bankruptcy Detection 15.535 - Class #16 1 Where have we been/where next? Complete discussion of accounting trading strategies from last class Cost of capital discussion http://www.ibbotson.com/content/cc_lvl1.asp

More information

U.S. SMALL BUSINESS ADMINISTRATION. Craig Jordan. Lead Lender Relations Specialist

U.S. SMALL BUSINESS ADMINISTRATION. Craig Jordan. Lead Lender Relations Specialist U.S. SMALL BUSINESS ADMINISTRATION Craig Jordan Lead Lender Relations Specialist James Pipper International Trade Officer GUARANTEED LENDING PROGRAMS UPDATE U.S. Government Export Financing Programs How

More information

Preparing Agricultural Financial Statements

Preparing Agricultural Financial Statements Preparing Agricultural Financial Statements Thoroughly understanding your business financial performance is critical for success in today s increasingly competitive agricultural environment. Accurate records

More information

BORROWING MONEY FOR YOUR BUSINESS

BORROWING MONEY FOR YOUR BUSINESS BORROWING MONEY FOR YOUR BUSINESS Disclaimer: There are thousands of books and websites that provide a great depth of information about how to finance a business with loans. This document provides a quick

More information

Lending 101 The Basics

Lending 101 The Basics Lending 101 The Basics Overview Loan categories Credit types Different loan types Interest rate Applying for a loan Credit & credit reports Simple loan tips Test Loan Categories Secured loan - a loan that

More information

1 Overview 1.01 INTRODUCTION

1 Overview 1.01 INTRODUCTION 1 Overview 1.01 INTRODUCTION 1.01(a) Scope Of This Work This treatise is a practical guide for secured creditors, i.e. creditors with collateral securing their claims against debtors, in the restructuring,

More information

TUCKAMORE CAPITAL MANAGEMENT INC.

TUCKAMORE CAPITAL MANAGEMENT INC. Consolidated Interim Financial Statements of TUCKAMORE CAPITAL MANAGEMENT INC. Three and Six Months Ended June 30, 2013 and 2012 (Unaudited) These statements have not been reviewed by an independent firm

More information

Wright County Enterprise Loan Fund Policies and Procedures

Wright County Enterprise Loan Fund Policies and Procedures Wright County Enterprise Loan Fund Policies and Procedures Established 1993 Revised December 1998 Revised December 2002 Revised in 2004 & approved by commissioners January 2005 1 I. OVERVIEW The purpose

More information

Informa's Web Ratios Explanation

Informa's Web Ratios Explanation Informa's Web Ratios Explanation Balance Ratios Working capital ( ) Current Assets - Current Liabilities The Working Capital represents the permanent funds part (Net Worth and Non Current Liabilities)

More information

Consolidated Statement of Profit or Loss (in million Euro)

Consolidated Statement of Profit or Loss (in million Euro) Consolidated Statement of Profit or Loss (in million Euro) Q2 2012 Q2 2013 % H1 2012 H1 2013 % Restated * change Restated * change Revenue 779 732-6.0% 1,513 1,437-5.0% Cost of sales (553) (521) -5.8%

More information

Xynergy Commercial Capital LLC

Xynergy Commercial Capital LLC Xynergy Commercial Capital LLC How Can Work For You The Problem Short of cash and must pay suppliers, lease, bills and salaries? No need for stress, get your payments in advance for your invoices and pay

More information

STATEMENT ON FINANCIAL POSITION

STATEMENT ON FINANCIAL POSITION STATEMENT ON FINANCIAL POSITION DESCRIPTION NOTE DAY 30.06.2013 31.12.2012 Fixed assets 218 532 221 493 214 682 Intangibles 3 583 3 057 3 033 Tangible fixed assets 2 69 812 69 272 63 027 Investment properties

More information

Land Acquisition and Development Finance Part IV

Land Acquisition and Development Finance Part IV Land Acquisition and Development Finance Part IV In last month s Learn article, we discussed tying up the land and a more in depth formal due diligence process. This article will discuss Development financing.

More information

Financing DESCOs A framework

Financing DESCOs A framework Financing DESCOs A framework A framework discussion about financing working capital for distributed energy services companies Chris Aidun and Dirk Muench March 2015 This paper looks at the growing need

More information

Financial. Management FOR A SMALL BUSINESS

Financial. Management FOR A SMALL BUSINESS Financial Management FOR A SMALL BUSINESS 1 Agenda Welcome, Pre-Test, Agenda, and Learning Objectives Benefits of Financial Management Budgeting Bookkeeping Financial Statements Business Financing Key

More information

SMALL BUSINESS DEVELOPMENT CENTER RM. 032

SMALL BUSINESS DEVELOPMENT CENTER RM. 032 SMALL BUSINESS DEVELOPMENT CENTER RM. 032 FINANCING THROUGH COMMERCIAL BANKS Revised January, 2013 Adapted from: National Federation of Independent Business report Steps to Small Business Financing Jeffrey

More information

BASIC FINANCIAL ANALYSIS. Yves HEIJMANS

BASIC FINANCIAL ANALYSIS. Yves HEIJMANS BASIC FINANCIAL ANALYSIS Yves HEIJMANS 1 Agenda Solvability (balance sheet) Liquidity (balance sheet) Profitability (profit & loss statement) Other financial ratios Ratings Practice 2 Balance sheet Assets

More information

Consolidated Statement of Profit or Loss (in million Euro)

Consolidated Statement of Profit or Loss (in million Euro) Consolidated Statement of Profit or Loss (in million Euro) Q3 2013 Q3 2014 % change 9m 2013 9m 2014 % change Revenue 689 636-7.7% 2,126 1,909-10.2% Cost of sales (497) (440) -11.5% (1,520) (1,324) -12.9%

More information

ARCH CAPITAL ADVISORS

ARCH CAPITAL ADVISORS ARCH CAPITAL ADVISORS TERM SHEET Mezzanine Debt This term sheet does not constitute an offer and is solely for discussion purposes. This term sheet shall not be construed as creating any obligations on

More information

Asset Quality Section 219

Asset Quality Section 219 Leasing Activities A lease is a contract between the owner of a property, the lessor, and a person or company authorized by the lease contract, the lessee, to use the property. The lease contract specifies

More information

9. Short-Term Liquidity Analysis. Operating Cash Conversion Cycle

9. Short-Term Liquidity Analysis. Operating Cash Conversion Cycle 9. Short-Term Liquidity Analysis. Operating Cash Conversion Cycle 9.1 Current Assets and 9.1.1 Cash A firm should maintain as little cash as possible, because cash is a nonproductive asset. It earns no

More information

Consolidated Statement of Profit or Loss (in million Euro)

Consolidated Statement of Profit or Loss (in million Euro) Consolidated Statement of Profit or Loss (in million Euro) FY 2013 FY 2014 % change Q4 2013 Q4 2014 % change un Revenue 2,865 2,620-8.6% 739 711-3.8% Cost of sales (2,031) (1,813) -10.7% (511) (489) -4.3%

More information

GrowFL and SunTrust Bank Present: How To Utilize The SBA Loan Programs To Improve Cash Flow And Grow Your Business

GrowFL and SunTrust Bank Present: How To Utilize The SBA Loan Programs To Improve Cash Flow And Grow Your Business GrowFL and SunTrust Bank Present: How To Utilize The SBA Loan Programs To Improve Cash Flow And Grow Your Business GrowFL Webinar Series Date: March 5, 2012 Presented by: Hetal Engineer, SunTrust VP hetal.engineer@suntrust.com

More information

Agrium Inc. - Company Profile, SWOT & Financial Report

Agrium Inc. - Company Profile, SWOT & Financial Report - Company Profile, SWOT & Financial Report ICD Research. This product is licensed and not to be photocopied _ TABLE OF CONTENTS 1 Agrium Inc. - Key Employees... 7 2 Agrium Inc. - Key Employee Biographies...

More information

Frequently Asked Questions About Asset-Based Lending

Frequently Asked Questions About Asset-Based Lending Bank of America Merrill Lynch White Paper Frequently Asked Questions About Asset-Based Lending January 2014 Executive summary Contents Asset-based lending offers a powerful financing solution for midsized

More information

Venture Debt Overview

Venture Debt Overview Venture Debt Overview Introduction When utilized appropriately, venture debt can reduce dilution, extend a company s runway or accelerate its growth with limited cost to the business If utilized poorly

More information

ITRON, INC. CONSOLIDATED STATEMENTS OF OPERATIONS

ITRON, INC. CONSOLIDATED STATEMENTS OF OPERATIONS , INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands, except per share data) Revenues $ 497,590 $ 446,746 Cost of revenues 334,387 308,324 Gross profit 163,203 138,422 Operating expenses

More information

UNDERSTANDING WHERE YOU STAND. A Simple Guide to Your Company s Financial Statements

UNDERSTANDING WHERE YOU STAND. A Simple Guide to Your Company s Financial Statements UNDERSTANDING WHERE YOU STAND A Simple Guide to Your Company s Financial Statements Contents INTRODUCTION One statement cannot diagnose your company s financial health. Put several statements together

More information

C&I LOAN EVALUATION UNDERWRITING GUIDELINES. A Whitepaper

C&I LOAN EVALUATION UNDERWRITING GUIDELINES. A Whitepaper C&I LOAN EVALUATION & UNDERWRITING A Whitepaper C&I Lending Commercial and Industrial, or C&I Lending, has long been a cornerstone product for many successful banking institutions. Also known as working

More information

Understanding Loans and Other Programs Available for Certified Minority Business Enterprises

Understanding Loans and Other Programs Available for Certified Minority Business Enterprises Understanding Loans and Other Programs Available for Certified Minority Business Enterprises Presented by Allen McConnell, Manager Minority Business Development Division Slide 1 Access to Financial Assistance

More information

Financial. Management FOR A SMALL BUSINESS

Financial. Management FOR A SMALL BUSINESS Financial Management FOR A SMALL BUSINESS Welcome 1. Agenda 2. Ground Rules 3. Introductions FINANCIAL MANAGEMENT 2 Objectives Explain the concept of financial management and its importance to a small

More information

CICA/RBC Business Monitor Economic Results Overview

CICA/RBC Business Monitor Economic Results Overview CICA/RBC Business Monitor Economic Results Overview Optimism Is Near 2007 Highs 100% 80% 60% Economic Optimism Company Optimism 40% 20% 0% Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009

More information

Learning Objectives: Quick answer key: Question # Multiple Choice True/False. 14.1 Describe the important of accounting and financial information.

Learning Objectives: Quick answer key: Question # Multiple Choice True/False. 14.1 Describe the important of accounting and financial information. 0 Learning Objectives: 14.1 Describe the important of accounting and financial information. 14.2 Differentiate between managerial and financial accounting. 14.3 Identify the six steps of the accounting

More information

Consolidated Statement of Profit or Loss (in million Euro)

Consolidated Statement of Profit or Loss (in million Euro) Consolidated Statement of Profit or Loss (in million Euro) Q3 2014 Q3 2015 % change 9m 2014 9m 2015 % change Revenue 636 661 3.9% 1,909 1,974 3.4% Cost of sales (440) (453) 3.0% (1,324) (1,340) 1.2% Gross

More information

3/22/2011. Financing an ESOP Transaction. Table of Contents. I. The Leveraged ESOP Transaction. John L. Miscione Managing Director

3/22/2011. Financing an ESOP Transaction. Table of Contents. I. The Leveraged ESOP Transaction. John L. Miscione Managing Director Presented by John L. Miscione Managing Director Table of Contents I. The Leveraged ESOP Transaction II. ESOP Tax Benefits III. Debt Capacity IV. Financing Markets and Terms V. The Lender s Perspective

More information

Solutions Made Simple

Solutions Made Simple Alternative Financing 1 Solutions Made Simple Unlocking The Alternatives March 3, 2011 Presented By: 2 Karlene Sinclair-Robinson Author / Entrepreneur / Speaker / Business Consultant Tel: 703-372-3248

More information

Equity Default Insurance

Equity Default Insurance Equity Default Insurance Increase your loan volume while mitigating your risk Expand lending opportunities without the risk Eligible Loan Types Include: Closed-End Seconds Home Equity Lines of Equity Default

More information

SBA 504 Loan Program FACT SHEET

SBA 504 Loan Program FACT SHEET SBA 504 Loan Program FACT SHEET The Oakland County Business Finance Corporation (OCBFC) was certified under the Small Business Administration's (SBA) Certified Development Company program in September

More information

GETTING A BUSINESS LOAN

GETTING A BUSINESS LOAN GETTING A BUSINESS LOAN With few exceptions, most businesses require an influx of cash now and then. Sometimes it is for maintaining growth; sometimes it is for maintaining the status quo. From where does

More information

Export Import Bank Financing Programs

Export Import Bank Financing Programs Export Import Bank Financing Programs The Export Import Bank of the United States (Ex Im Bank) is the official export credit agency of the United States. Ex Im Bank assists in financing the export of U.S.

More information

Can t Get 30 Day Credit Terms With Your Suppliers? Get Business Credit Assurance.

Can t Get 30 Day Credit Terms With Your Suppliers? Get Business Credit Assurance. Can t Get 30 Day Credit Terms With Your Suppliers? Get Business Credit Assurance. WWW.NET30CREDIT.COM How Credit Assurance Works. Once your credit is approved, we can issue credit assurance to your qualified

More information

B Exercises 4-1. (d) Intangible assets. (i) Paid-in capital in excess of par.

B Exercises 4-1. (d) Intangible assets. (i) Paid-in capital in excess of par. B Exercises E4-1B (Balance Sheet Classifications) Presented below are a number of balance sheet accounts of Castillo Inc. (a) Trading Securities. (h) Warehouse in Process of Construction. (b) Work in Process.

More information

Module 2: Preparing for Capital Venture Financing Financial Forecasting Methods TABLE OF CONTENTS

Module 2: Preparing for Capital Venture Financing Financial Forecasting Methods TABLE OF CONTENTS Module 2: Preparing for Capital Venture Financing Financial Forecasting Methods Module 2: Preparing for Capital Venture Financing Financial Forecasting Methods 1.0 FINANCIAL FORECASTING METHODS 1.01 Introduction

More information

It is concerned with decisions relating to current assets and current liabilities

It is concerned with decisions relating to current assets and current liabilities It is concerned with decisions relating to current assets and current liabilities Best Buy Co, NA s largest consumer electronics retailer, has performed extremely well over the past decade. Its stock sold

More information

BSM Connection elearning Course

BSM Connection elearning Course BSM Connection elearning Course Basics of Medical Practice Finance: Part 2 2009, BSM Consulting All rights reserved. Table of Contents OVERVIEW... 1 PRACTICE PERFORMANCE RATIOS... 1 UNDERSTANDING THE CONCEPT

More information

Basics of Project Finance Return to Grid of Topics. Project Finance. Session on Finance. Sidharth Sinha. Indian Institute of Management, Ahmedabad

Basics of Project Finance Return to Grid of Topics. Project Finance. Session on Finance. Sidharth Sinha. Indian Institute of Management, Ahmedabad Basics of Project Project Session on Sidharth Sinha Indian Institute of Management, Ahmedabad Project Objective Financing a single purpose capital asset usually with a limited life Project vehicle Legally

More information