Financing Alternatives in Troubled Times - Aberdeen Funding

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Financing Alternatives

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Use the right tool for the job …. Understand the implications of using different sources Don’t buy a car on your credit card (Obvious, right?)

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Source FOR AGAINST Personal Resources SAVINGS Independence Risk of Loss Opportunity Cost CREDIT CARDS Convenient Very short term Personal Credit Risk HOME EQUITY Somewhat inexpensive Long Term Lose your home?

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Family and Friends

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Who needs a lighthouse in the daytime? Banks

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Requirements & Features of Bank Loans

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Small Business Administration Different SBA programs An SBA Loan is a bank Loan guaranteed by Govt.

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Non-traditional Sources Sale of Shares in business to outsiders Loss of control Venture Capital Large amounts, loss of control Preferred Stock Paying fixed amounts, voting issues Factoring, also known as Accounts Receivable Financing Grows with you, flexible, easy, based on value of sales Asset-based lending Based on fluctuating values

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Features of Factoring

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ASSETS LIABILITIES Cash $80,000 Payables $60,000 Receivables $ 100,000 Loan from bank $ 80,000 Current Assets $180,000 Current Liability $140,000 Plant $100,000 Stock $50,000 Accrued Income $90,000 Total Assets $280,000 Total Liability & Equity $280,000 Balance Sheet & Off Balance Sheet ASSETS LIABILITIES Cash $80,000 Payables $60,000 Receivables $ 20,000 Current Assets $100,000 Current Liability $60,000 Plant $100,000 Stock $50,000 Accrued Income $90,000 Total Assets $200,000 Total Liability & Equity $200,000 100 : 60 Liabilities are covered 1 : 66 180 : 140 Traditional 1 : 28

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Why wait 30 to 90 days for your receivables? Factor your invoices to free up working capital. www.AberdeenFunding.com