New Business Borrowing Basics (2023-2024 Ed.) – Webinar Premiering August 29, 2023

Leading Professionals to Teach About Business Borrowing Basics

Financial Poise Webinars™ announces “Alternative Structures- PO Financing, Factoring & MCA,” a live webinar premiering August 29th at 1:00 PM CST. This webinar is co-produced by West LegalEdCenter™ and part of the “Business Borrowing Basics 2023” series. It will feature Jonathan Friedland (Much Shelist, P.C.); Megan Flaherty (Rosenthal Trade Capital at Rosenthal & Rosenthal, Inc.); Mark Mandula (United Capital Funding) and Harvey Gross (New York Institute of Credit).

Note that the term is “financing” rather than “loan” because factoring is not actually a loan.

Purchase-order financing (P/O financing) is a type of asset-based loan designed to extend credit to a company that needs cash quickly, to fill a customer order. A company may operate with such a small amount of working capital that it cannot afford to pay the cost of producing a customer’s order. P/O financing enables such a company to not turn away business, by borrowing from a lender using the purchase order itself as collateral to support a loan.

Factoring is one of the oldest forms of business financing. Note that the term is “financing” rather than “loan” because factoring is not actually a loan. In a typical factoring arrangement, the company needing financing makes a sale, delivers the product or service and generates an invoice. The factor (the funding source) then purchases the right to collect on that invoice by agreeing to pay the company in need of financing the amount of the invoice minus a discount.

MCA lending is, in summary, an advance on a company’s sales. Financing through a merchant cash advance (MCA) is used mostly by companies that accept credit and debit cards for most of their sales, typically retailers and restaurants. The concept is this: funder purchases a portion of the company’s future credit card receivables for a discounted lump sum. The MCA funder receives the purchased credit card receivables as they are generated either by taking a percentage of the company’s daily credit card proceeds or by debiting a certain amount of funds from the company’s bank account. Depending on the risk profile of the company, it can be a more expensive form of financing for a business compared to other types of financing.

What these three things have in common is that they are each a type of “alternative lending.” Alternative to what? To the type of loan a company can get from a “regulated” commercial bank. This webinar explains these types of financing arrangements, what to consider before entering into them, and provides some tips on how to negotiate them.

Learn More or Register:
https://westlegaledcenter.com/program_guide/course_detail.jsf?courseId=100299230.

Note: If you or your firm are subscribed to West LegalEdCenter™, this webinar is included in your subscription at no additional cost.