We are a small medical supply distributor that has been in business for 2 years. We started the business with our own personal funds feeling that when we hit the 2 year mark banks would be willing to offer some traditional financing. We are on the verge of reaching profitability and have just signed a contract with a large customer that will triple the sales of our business and make us profitable. We need funding to increase inventory levels to accomodate this substantial growth. We have looked at factoring, purchase order financing and other traditional methods. None solve the issue of getting the large inventory in stock immediately to accomodate the quick growth. Are there companies that can get creative enough to structure a line of credit that will accomodate this need.
#1. "RE: Is there funding available for small business." In response to Reply # 0
My first suggestion would be to go to the bank where you have your business checking account. Do you have a business plan in writing? If not you need one that details out how much you need, how it will be spent and how it will be paid back.
Put an investment proposal together and talk to doctors, they have cash to invest and right now the stock market is a train wreck. If you can offer a reasonable return on their money over a two year period you have a chance.
I don't know how much you are looking for but if you can get an investment group together then make an appointment to talk with someone at your bank of choice. Show them what you are doing and explain that is your hope in the next year or two that the bank will step up to the plate with a line of credit that will make this type of financing a one time event. Then monthly (or quarterly) show your banker that you are making the payments to the investors and show them how your business is growing. In this market an informed lender is far more likely to lend.
#4. "RE: Is there funding available for small business." In response to Reply # 0
You have a typical dilemma. You need on hand inventory to increase the volume of outgoing sales. I can tell by your description you will not find help with "inventory financing" which tends to kick in with a minimum of $500K of inventory.
A bank line of credit can be risky because you may not qualify for the amount you really need, thus leaving you cash starved once again. The very best method to get around this problem is talking to the suppliers. They are in the very best position to understand what you are doing and have the most incentive to be cooperative. You would need to convince them you have a very conservative fiscal approach to your business, have a good pipeline of new business AND this is the most important piece to have in place, you are doing thorough honest credit checks on your customers. You need to show what processes are in place to maintain good creditworthy customers and insist on COD with less creditworthy customers. The discipline to turn down a sale because the account debtor has bad credit.
I have a saying about credit "anybody with no credit will buy anything on credit."
#5. "RE: Is there funding available for small business." In response to Reply # 0
This is on another post and may work for you too:
Bentley Capital Fund has just started a program specifically for small businesses. Since this credit crisis is hitting small businesses? ability to raise capital, we can help keep your business running.
We offer financing against a percentage of future Visa, MasterCard, American Express, and/or Discover sales that let you to get the capital you need now. These loans are based solely on forward earnings ? your payments are a percentage on what you make, not a set monthly payment. There is no collateral required, no closing fees, application costs, or fixed payments, so there?s no risk.
We can provide funds in 7 days or less, and Bentley Capital Fund has a 90% approval rate. For more information, please speak with one of our representatives at 800-548-9177 or fill out our online application at http://fundingbybentley.com/ and someone will contact you immediately. We look forward to hearing from you!
#6. "RE: Is there funding available for small business." In response to Reply # 0
"We need funding to increase inventory levels to accomodate this substantial growth."
Congratulations on the growth opportunity.
I know with many companies in the medical/dental and health-care industry, a substantial amount of money can get tied up in delinquent accounts receivable, returned checks, slow-paying clients etc.
While this might not provide an instant solution to your financial situation, recovering your overdue accounts certainly wouldn't hurt.
My company handles this for several Fortune 500 clients, as well as about 60,000 other companies around the world. We work off of a flat fee as low as $10 per account instead of a percentage charge, and all the money we recover goes to you directly.
Even if you decide not to use our service, I can talk to you about some options.
#7. "RE: Is there funding available for small business." In response to Reply # 6
There is funding available for small businesses. However, it is becoming more difficult these days, even with the stimulus package. I would reference the U.S. Small Business Administration and if you want to obtain a loan under $25,000, you should reference their Community Express Loan. Based upon your needs and credit score, this can usually be processed within 48 hours. So, not sure if that would help or not.
Another idea is looking at grants. A great resource which I actually worked on with my company is at www.innoventum.com/bizgrant.html. I am a business and, more importantly, a grant and government relations attorney of 15 years. Have worked with a number of clients to obtain grants for them over the years. Most of your grant opps are going to be with a not-for-profit organization, unless you have an educational, technological or some other innovative concept. Check out the product and see if it fits for you. We walk you through how to search for grants, obtain grants and respond to grants. Clearly, this is not an overnight process where the government hands you a check. However, it may be worth exploring for your long-term business case model.
#8. "RE: Is there funding available for small business." In response to Reply # 0
We just launched a new venture to assist with this very thing. You need alternative credit resources and to be able to establish business/vendor credit. Become a member of The Best In Credit.com and you'll be on your way. Inventory is one of the many areas that trade credit covers so it would be ideal for your business to join.