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RE: [SmallShopNetwork] XP - Small Business Grants and Loans - Options Available?

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  • Sam Waltz
    Ned, re: your query on Options to Small Business Grants / Loans. I usually rank Investment Capital sources this way. a) Entrepreneur s, e.g., savings,
    Message 1 of 2 , Oct 21, 2009
      Ned, re: your query on Options to Small Business Grants / Loans.



      I usually rank Investment Capital sources this way.

      a) Entrepreneur's, e.g., savings, credit cards, personally-guaranteed
      loans;

      b) F&F, Friends & Family;

      c) Investment Capital



      No one gives away money, except maybe the Gov'mint. And it's not giving
      away its own money, but rather it's giving away taxpayers' money that it
      forcibly extracts.



      Pardon that, but, moving to problem-solving your query then.



      You referenced purchases to "fulfill contracts," which suggests that he has
      secure commitments for work which will bring in revenue.



      Banks may lend him money on Contracts, although they'll likely want a UCC
      statement / agreement.



      Certainly, though, a group of lenders called "Factors" make their livings
      lending on ARs, including this kind of thing. Their interest and fees run a
      bit higher than banks, but it's lower than loan sharks. And they don't
      break your legs. Basically, the borrower "sells" them the contract, the AR
      (Account Receivable), typically for about 80% of its face value, and then,
      when your client's customers pay her / him, that check goes directly to the
      factor, who rebates to your client any of the unused "hold back."



      Frankly, it's a good system that has its roots in the old NY garment
      industry. A garment-maker would receive order, and he'd need to be lots of
      material, and other things, so he'd in effect sell the AR on which the order
      was based to a factor who gave him the payment up front which allowed him to
      finance his COGS (cost of goods sold).



      So, indeed, if your statement is accurate, that he has orders in hand as he
      claims, then he ought to be able to find a factor who could help him finance
      his COGS.



      Sam

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      From: SmallShopNetwork@yahoogroups.com
      [mailto:SmallShopNetwork@yahoogroups.com] On Behalf Of Ned Barnett
      Sent: Wednesday, October 21, 2009 10:06 PM
      To: PRMindshare@yahoogroups.com; prbytes@yahoogroups.com;
      prquorum@yahoogroups.com; SmallShopNetwork@yahoogroups.com
      Subject: [SmallShopNetwork] XP - Small Business Grants and Loans - Options
      Available?





      As a favor to a client, I'm working with an individual who is working on an
      SBA Express Grant program grant (I'll be writing the grant application and
      mini-business plan)

      The program has financial caps that are lower than this individual's
      financial needs, so I'm looking for ideas as to other small business loans
      and grants that this individual might qualify for.

      A few facts:

      . He is a minority small business owner with good credit.

      . He has a landscape business that has a fast-track for some
      municipal contracts in his area of Florida.

      . He needs the loan to purchase the equipment (trucks, etc.) needed
      to fulfill these contracts

      Needs to be done before the end of 2009 to maintain his fast-track status
      for these contracts.

      Any suggestions or ideas on programs I can tap into? I'd be glad to look at
      Federal/State programs, Foundation programs (this is both a minority-owned
      business and, as a landscaper, this probably qualifies as a "green"
      business, as he'll be planting trees and shrubs and other living things).

      Suggestions? Ideas?

      Ned

      Ned Barnett, APR

      Marketing/PR Fellow, American Hospital Association

      Barnett Marketing Communications

      420 N. Nellis Blvd. A3-276

      Las Vegas NV 89110

      702-696-1200 - ned@... <mailto:ned%40barnettmarcom.com>

      http://www.barnettmarcom.com

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