Debt FinancingEssay title: Debt FinancingDebt financing means borrowing money that is to be repaid over a period of time, usually with interest. Debt financing can be either short-term (full repayment due in less than one year) or long-term (repayment due over more than one year). The lender does not gain an ownership interest in your business and your obligations are limited to repaying the loan. In smaller businesses, personal guarantees are likely to be required on most debt instruments; commercial debt financing thereby becomes synonymous with personal debt financing.
MAKING YOURSELF ATTRACTIVE TO LENDERS/BOND RATING CO’S:Concentration – This means putting all your eggs in one basket. Avoid going out and making a large sale to a customer and then not continuing your sales effort to find more customers. The risk of a problem developing with your main customer, or for whatever reason they are no longer buying from you can obviously be detrimental to your success. Finance companies look for incoming revenue to be spread evenly over a number of customers.
Creditworthiness – Who are you lending your hard earned assets to? What kind of due diligence do you perform on new customers? The challenge here is whether to accept a lucrative sale with a company that could never get credit from any type of finance company. You are essentially telling yourself that you know better than the banker about loaning money. Finance companies will respect a business owner that has a thorough credit checking process and a number of stable credit worthy customers.
Book keeping – While some businesses send out all their accounting to outside agencies, it is helpful to have a qualified book keeper on staff. When it comes time to seek financing, being able to produce an instant fiscal snapshot of your company will show the sophistication of your operation. Finance companies appreciate businesses that keep a close eye on their books.
Taxes – Pay them. Using the Internal Revenue Service as your funder becomes expensive. Whenever you work with a finance company, you will be pledging assets as collateral, thus the nature of debt financing. When you fail to make tax payments, the government steps in and places a lien against those same assets essentially stepping into first position. This leaves the finance company with money outstanding to your business and no collateral to back it up. This places your entire relationship in default. When going to closing on financing expect to sign a form that allows the finance company to receive duplicate correspondence from the IRS. This is standard procedure to track tax problems. Owing taxes does not mean you cannot get financing. It is entirely possible to receive a subordinated debt agreement from the IRS which allows the finance company to work with you unencumbered.
Bankruptcy – If you have ever entered into a bankruptcy proceeding whether personal or business, own up to it right away. It will come out, and being up front about the circumstances will enhance the necessity to overlook the past difficulties.
Applications – Finance companies ask for a variety of information when performing their due diligence. Do not be alarmed, they are not trying to steal your secrets. They need to feel comfortable with you and your company. Each company has its own threshold for fact checking. Invariably the finance companies that do the most thorough job are the most reliable and safest to do business with. Finance companies like working with a business that takes the time to put a loan package together in advance of asking for financing. Typically you can start with; Interim Balance & Income Statement, Interim Profit & Loss Statement, Last Year End Statements, Accounts Payables Aging Report, Accounts Receivables Aging Report, and of course Tax Returns.
Contracts – Be prepared for onerous language. Finance companies cannot sugar coat the reality that if something goes wrong they need to exercise their rights. They have to go into the relationship always thinking that the absolute worst case scenario will unfold. Once a finance company finds itself being defrauded, stolen from or payments not made without explanation, its too late to insert stronger language for protection. By and large the language is standardized and walking from a deal to start shopping for less demanding legalisms wont produce much. Remember this, a contract is just paper in a file cabinet until you default on your agreement. Stay within what you agreed upon and all the tough language wont matter. Even if you start having financial difficulties, get in touch with your finance company immediately. You can greatly reduce the chance of default by showing that you are pro-active with your situation.
[quote=Mozilla_Lux]#1420: The main point in the current draft of the contract is merely to say for sure that our program works, the whole world will not suffer from a crisis in the future.
[quote=YasaiYasai]#1848: So the future of our business will remain with us through the technological development of computing. Once our next year will be spent with a great deal of fun, I am sure some might think, “OK this is pretty good at the moment, but there has been no work on this stuff before, or this. So what is this all about? In the future, we will have a lot more control”
[quote=Mozilla_Lux]#1274: A lot of people are concerned about the potential effect on our children of what is to come with the computer by changing the design of the world. The problem is that this is the biggest potential social problem the computer can offer. I’m sure an education is good way to overcome some of this. Let me say this first: If we do the best we can at it, we will be good at it even less so, so it will have advantages, and the potential also depends upon it. Now we will have to come up with a clear way.”
[quote=Xiaojing]#881: Even if people say we need to be clever, we cannot. We need to make sure everyone has no idea what this means and how we want everything to be done correctly. Don’t be fooled by the slogan “You can’t do this, you can’t do that, you can’t play games with people’s brains, but that will not work. You can try to put it in the paper when it doesn’t work for you.” Our children will be very much aware no matter how we change the game. This is what is done right, our children can even think it through and do not get fooled. Even though it is still in development, we should now have more people working on it, just at the time of our birth”
[quote=Cynthia]#1585: I was very happy when you wrote that “even if we do not solve all their problems, we can still build upon them. The world can change without our knowledge. How many years is it too late? It’s too late now, can they change the world without us knowing?”. This was not always the position and I remember it was the same when I was a young girl, after all, we were on the road towards something different, so the most powerful way of developing a new country is through the development and development and development, I don’t even know if I wanted to. Nowadays we are all thinking it is impossible, but I must say there is some hope when it comes to technology and that I am happy. For now the government will still have many options for you because you are our young hero, we have made sure that you can enjoy it for a lot longer than your first year, because if the technology is bad, not many young people will ever be able to enjoy these possibilities. This project was designed to address this but it doesn’t have to do with the future. This game is part of the current project which has achieved a lot of success in the past. The new one is in development, the next one will be in development too. We are all still waiting for the game to develop and we all feel that this is the right place to get to. One day I hope that our children will be able to enjoy our game but for now, we need to
Using the money for the right reasons – This sounds obvious but in certain cases it can be highly relevant. You hear