Alternative Financing

There are numerous alternative financing solutions to private businesses.  Many are available from traditional sources, including banks; others can be found through the financial services community.  UBA can be of assistance in identifying the “right” solution, as well as service as a resource for the analysis, processing and development of these resources. 

Leasing

A simple solution – however, there are many providers.  A company may be able to reduce the amount of cash that is needed on a monthly basis by leasing, rather than buying items.  From vehicles to computers to employees can be leased. 

Leasing reduces the cash outlay – this may be critical at a start-up stage of business.  It is important to compare the up-front costs, as well as the total costs.  There are tax considerations in lease solutions, as well. 

Trade Credit

Once a company has obtained a good reputation with suppliers, they will typically offer payment terms – standard is 30 days; however, a company may be able to negotiate longer terms, up to 90-120 days, either in consideration of the volumes being generated, or with add-on fees.  These terms/negotiations can be an integral part of cash management.

Purchase Orders

There are firms which specialize in the financing of purchase orders.  If reputable companies are involved, various securities and/or assets can be properly defined and a valuation given, this type of financing can be advantageous.  Typically these financings are short-term; perhaps only 30 days.  And, the longer the term of “carry”, the higher the interest rate.

Factoring

There are small and large firms that focus on financing through factoring.  Many companies would refer to this as “collections”; but, it is different.  The methods and terms are pre-determined, and the rates are pre-calculated, with the factoring occurring on a monthly basis – therefore, a cash management system can be developed.

Customers

Certainly customers can be a source for funds and financing – they may provide raw materials upfront; or, they may be willing to pay a cash deposit on some portion of the total cost.  This method of front-end collection is not feasible in all businesses.

There are other forms, and variations on financing that UBA will be happy to discuss with you, and your client.  UBA can assist in the negotiation and securing of all types of financing.