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Start up Truths
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Its Harder It Takes Longer It costs more money Sales are slower to come Most business failures are due to inadequate
funding and/or poor cash flow
Funding sources know thisYou should too - Be realistic - Plan for it
Financing Continuum
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Best in Class Approach to Funding
A Portfolio of Funding Includes 3 or More:
Options: Trade Credit – Free Smaller amounts of private Equity Fixed Asset Loans Working Capital Line of Credit A/R Factoring Line Purchase Order Financing line Equipment Leasing or Sale / Leaseback Personal Capital
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Equity
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Requirements of Private Equity
Executive Management Team with “Experience”
A Product with value
High Value Market and a way to reach it
Realistic Business Plan
Successful Execution Experience
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This is the only free money available
Give trade credit the highest respect – do not rob Peter to pay Paul if Peter is a supplier
Your suppliers will likely increase free trade credit if you pay on time or early
Once trade credit is lost the requirements for cash can increase exponentially
Availability of trade credit affects your credit rating
FREE MONEY
Alternative Funding
Asset Based Lending (ABL)Unlocks value of standing assetsPurchase Order FinancingAccounts Receivable FinancingInventory Financing Sale / Leaseback of equipment
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Financing Continuum
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10Just in time funding…
AR & PO Financing
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CLIENTS NEED Integrity, solvency, reasonable margins Quality of products / services Quality of documentation Credit worthy customers
The client may be credit impaired. The decision is based on the credit quality of their customers.
Able to provide security we require
Requirements
Not Required
Length of time in Business
Perfect company credit
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Commercial Business B to B
Government Contracts
Non-consumer
Sales of $10,000 to $10,000,000 per month (startups OK)Lack availability to sufficient traditional bank financing Deliver quality products or servicesQuality and diversification of customersGrowing, Transitional or Restructuring CompaniesDebtors in Possession
Client Profile
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Client Profile
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Low credit quality customer base
Post delivery performance requirements
Erratic or unmanageable dilution in accounts receivable
Purely business to consumer (B to C)
Poor customer documentation (i.e. PO, Work Order, Contract, Invoicing, Proof of Delivery)
Client Profile
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Significantly increases cash flow
Improves sales & production capacity
Improves your Balance Sheet
Improves credit rating / vendor relations
Increases purchasing power
Its like outsourcing your A / R & Billing Function
Management stays focused on business development & operations rather than
credit & collections
Benefits
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Staffing / Temporary Employment Services
Environmental & Oil Field Services
Manufacturing & Wholesale Distribution
Service Companies of all kinds
Janitorial
Guard services
Landscape maintenance
Government Contractors
Transportation / Trucking
Printing
Benefits
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ABL – Asset Based Lending• A/R Financing – Factoring• Purchase Order Financing• Leasing / Sale - Leaseback• Import / Export Factoring• Inventory Financing
North America Coverage Since 1999
Advantage• Locally owned - local underwriting• Fast, Flexible financial packages• Clients: from Startups to $10M / Mo.•A/R & Billing services•Over 30 credit & collections staff
Liquid Capital
Members of Accord / Montcap / Liquid Capital
Financial FamilyCollectively Financing more than
$1 Billion Annually
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Bruce Dawson, President Patrick Dawson, VP Business Development
Liquid Capital of Colorado
Tel: 303-774-7623Fax: 888-774-7262Cell: 303-902-7056
[email protected]@LiquidCapitalofco.com
www.LiquidCapitalofCo.com
Thank You
Helping Businesses Succeed
