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- Factoring - Cash to Survive
ABC Company manufactures widgets and sells them
to BIG, Inc. ABC Company is not paid at time of delivery and must send BIG, Inc. an invoice for each shipment. Invoices
are often not paid for 30 to 60 days. ABC Company frequently struggles to find the cash to pay suppliers and fund payroll.
Factoring would allow ABC Company to obtain 80% of the invoice amount (accounts receivable) within a day or two after
delivery. Working capital is made available 30 to 60 days sooner. The balance still due of 20% minus a small fee will be
paid to the ABC Company when BIG, Inc. has paid the factor in full.
- Bidding on a New Opportunity - Cash
to Grow
Joe, the owner of a small service firm, has learned of an opportunity to bid on a municipal contract. He sees
this as an ideal way to almost double his annual revenues and raise the visibility of his company. Joe has always operated
on a COD (cash on delivery) basis and this contract would require monthly invoicing with net 30 terms; he also knows that
this municipality often pays slowly. He has never been successful in obtaining bank financing and is concerned about how
to finance the additional equipment, staff and supplies that he would need if he was awarded the contract.
Joe contacts
OCG Financial, LLC to discuss equipment leasing and factoring and is able to prepare the most competitive bid possible and
has the confidence that he will have adequate cash flow.
- Advancing Lease Payments - Cash for a New Business
Jane
has property which is currently leased to Doe, Inc. The contract states that Doe, Inc will pay Jane $15,000 per month for
ten years. This represents a total amount due of $1,800,000. Jane would like to purchase a new business today and needs
$500,000 in cash.
OCG Financial, LLC can work with Jane to purchase the entire lease from her or give her the option
of selling a certain number of future payments for the sum of $500,000. Thus, Jane now has the capital for the new business
and still retains her property by cashing in a portion of the lease payments she would have been receiving. When the period
of time has passed that she had agreed to, enabling her to create the money needed to purchase the new business, any remaining
lease payments due are now hers again. Jane has her cake and gets to eat it too!
- Selling a Business -
Cash from a Note
Fred has owned his distribution business for many years and would like to sell it to retire. He is
correctly concerned that a prospective buyer would have difficulty obtaining a bank loan to fund the purchase of the business.
The business rents its office and warehouse space. The only collateral is the business name and belongings inside such as
a few computers, office furniture, and warehouse hand trucks.
Unless he is fortunate enough to find a prospective
buyer who is willing and able to pay cash for the business (highly unlikely!), Fred realizes that he will have to hold a note
from the buyer. While having an income stream from a note is nice, Fred wants a lump sum of cash to buy a home in Arizona.
Fred
and his advisors seek assistance from OCG Financial, LLC and learn how to structure his sale transaction so that the note
he will hold can be sold in the shortest time and at the best price. Fred can sell his business and be able to receive cash
for his note.
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