Today getting a small business loan is a daunting task at best " regardless if you are in the United States or Canada. Many businesses look to Angel Investors for the much needed cash injections the banks had turned them away for. But is this the Best Alternative?
Be aware that Angel Investors typically look for a ROI of 5 " 10 times their investment in under 5 years. This is accomplished by looking at many aspects including the salvage value of your company. They will create an exit strategy to recover the funds from your company in the predetermined time frame regardless of consequences to your company.
Angel Investors have now increased their threshold for their ROI to a minimum of 10 times to as much as 50 times their investment because of the failure rate and the length of time that the investor will be tied into the company. When you consider the bigger picture, the effective return on investment for the Professional Angel Investor is usually around 20% to 30%.
Due to this excessive ROI requirement, Angel Funding is very expensive, but the lesser expensive funds at the bank are not available. Banks typically do not like new start-ups or companies with out strong financials.
So you are declined at the bank and you can not afford Angel Investorsnow what?
It is irrelevant if you are in Canada or the United States, the story is the samebut there are options. This is a real life deal that I just completed recently. It is a Distribution company in Alberta Canada that had a unique product that it wanted to market throughout North America. The owner went to the usual banking institutions and was denied the loan. He then spoke to a few Angel Investors who gave him proposals which he did ponder over but shortly after continued to search for options. When I spoke with him I suggested a combination Accounts Receivable Factoring and Purchase Order Finance facility.
When I had initially spoken to the owner of the company, he had shipped out one large order and was about to ship out his second large order which was going to wipe out his entire inventory and he would have to wait to receive payment from the customers before he could replenish his stockbut he had several additional orders to be filled and he had no way to fill them without cash.
After I received the application from him it was about a week when he received his first advance on his new Line of Credit using Accounts Receivable Factoring and now he has the cash to make his business run more smoothly.
So if you have a situation going on at your company that you can not fill orders or pay bills because of the cash flow constraint, and the banks and other lenders have been no help to you, be sure to check into Accounts Receivable Factoring and Purchase Order Finance. - 15246
Be aware that Angel Investors typically look for a ROI of 5 " 10 times their investment in under 5 years. This is accomplished by looking at many aspects including the salvage value of your company. They will create an exit strategy to recover the funds from your company in the predetermined time frame regardless of consequences to your company.
Angel Investors have now increased their threshold for their ROI to a minimum of 10 times to as much as 50 times their investment because of the failure rate and the length of time that the investor will be tied into the company. When you consider the bigger picture, the effective return on investment for the Professional Angel Investor is usually around 20% to 30%.
Due to this excessive ROI requirement, Angel Funding is very expensive, but the lesser expensive funds at the bank are not available. Banks typically do not like new start-ups or companies with out strong financials.
So you are declined at the bank and you can not afford Angel Investorsnow what?
It is irrelevant if you are in Canada or the United States, the story is the samebut there are options. This is a real life deal that I just completed recently. It is a Distribution company in Alberta Canada that had a unique product that it wanted to market throughout North America. The owner went to the usual banking institutions and was denied the loan. He then spoke to a few Angel Investors who gave him proposals which he did ponder over but shortly after continued to search for options. When I spoke with him I suggested a combination Accounts Receivable Factoring and Purchase Order Finance facility.
When I had initially spoken to the owner of the company, he had shipped out one large order and was about to ship out his second large order which was going to wipe out his entire inventory and he would have to wait to receive payment from the customers before he could replenish his stockbut he had several additional orders to be filled and he had no way to fill them without cash.
After I received the application from him it was about a week when he received his first advance on his new Line of Credit using Accounts Receivable Factoring and now he has the cash to make his business run more smoothly.
So if you have a situation going on at your company that you can not fill orders or pay bills because of the cash flow constraint, and the banks and other lenders have been no help to you, be sure to check into Accounts Receivable Factoring and Purchase Order Finance. - 15246
About the Author:
Wade Henderson is a recognized Professional in the Commercial Lending Industry with over 13 years Experience in the Business Finance Field and a strong reputation for getting the deal done. Visit his Commercial Finance Website to put his experience to work for you.
