Financial Services

 

Financial services is an umbrella, general term encompassing various financing facilities available to small businesses the specific form of which is directly related to the small business model.

 

Some examples of the variety of financial facilities are:

  • Invoice factoring.
  • Asset-based lending.
    This type of facility is usually available only to larger small business and involves an arduous application, approval, and on-going reporting process:

    • Past 2 years federal income tax returns.
    • Past 2 years Profit and Loss Statements and Balance Sheets.
    • A substantial deposit to cover the costs of documentation, legal fees, including the drafting of the Loan and Security Agreement, UCC searches, etc.
    • An initial audit by the lender.
    • Monthly asset reporting.
      • Month-end aging
      • Monthly Profit and Loss Statements and Balance Sheets.
      • The preparation and delivery of a Borrowing Base Certificate (BBC) which accounts for and deducts ineligible accounts, balance the loan balance against the collateral, and calculates the availability, which is the total that can be borrowed on any given day.
    • Term loans usually over 3-5 years.
      The typical collateral for these loans is machinery and equipment and inventory. 
    • Equipment leases.

Financial Services

 

Financial services is an umbrella, general term encompassing various financing facilities available to small businesses the specific form of which is directly related to the small business model.

 

Some examples of the variety of financial facilities are:

  • Invoice factoring.
  • Asset-based lending.
    This type of facility is usually available only to larger small business and involves an arduous application, approval, and on-going reporting process:

    • Past 2 years federal income tax returns.
    • Past 2 years Profit and Loss Statements and Balance Sheets.
    • A substantial deposit to cover the costs of documentation, legal fees, including the drafting of the Loan and Security Agreement, UCC searches, etc.
    • An initial audit by the lender.
    • Monthly asset reporting.
      • Month-end aging
      • Monthly Profit and Loss Statements and Balance Sheets.
      • The preparation and delivery of a Borrowing Base Certificate (BBC) which accounts for and deducts ineligible accounts, balance the loan balance against the collateral, and calculates the availability, which is the total that can be borrowed on any given day.
    • Term loans usually over 3-5 years.
      The typical collateral for these loans is machinery and equipment and inventory. 
    • Equipment leases.