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Business Lending Companies An Overview Of The SBA, Online Lenders, And Other Options

There are funding solutions for all types of businesses, although the more established businesses in good financial standing have the most options. Business lending companies vary from SBA-associated organizations to “angel investors”. The most common types of lenders are obviously traditional banks, but that might not be the right option for you.

If your company is just kicking off, you’ll need to look into start-up loans as well as crowdsurfing solutions (if you are able to come up with a good viral campaign). There are also internet-based lenders that are always looking for new businesses with good, innovative ideas.

SBA loans aren’t for everybody, but you might want to consider them if you think you’ll be able to qualify. It’s not true that the government gives them away as start-up loans. It is true, however, that they have different credit underwriting terms, standards, and several other factors that set them apart from traditional business loans.

Keep in mind that the Small Business Administration does not actually give out money itself- it has a menu of offerings through the firms it partners with. Whether you are looking for funds to help you get started with a small business, to recover from disaster, or for expansion purposes, there might be an option for you through the SBA.

Business Lending Companies Online

There are businesses who would prefer to go through the online funding offers – especially those that aren’t as strict with their requirements. For instance, most lenders will check your personal and business credit history to evaluate your amount of lending risk. If you don’t have a good, strong credit history, you’ll have to start cleaning up your debts and getting credit repair services to help you improve your score as quickly as possible.

No matter which business lending companies you are considering, you’ll need to have a solid business plan. This plan should include detailed short-term and loan-term goals. If you have a financial advisor or certified public accountant, have them to review the plan to let you know if it is financially feasible and if everything looks good.

Consider your cash-flow cycle and expenses as well. The cash-flow cycle includes payments and the flow of cash – both in and out. The expenses obviously refer to the amount of money you need currently and will need in the future in order to meet your financial goals.

Regardless of what kind of business you have and what kind of funding you are after, don’t overlook AnalytIQ Group Corp. AnalytIQ offers equipment financing, working capital, small business loans, and more. You can easily get a free quote and (possibly) a quick approval.

Article Source: https://EzineArticles.com/expert/George_Botwin/1425000

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Revenue-Based Financing For Technology Companies With No Hard Assets


Revenue-based financing (RBF), also known as royalty-based financing, is a unique form of financing provided by RBF investors to small- to mid-sized businesses in exchange for an agreed-upon percentage of a business’ gross revenues.

The capital provider receives monthly payments until his invested capital is repaid, along with a multiple of that invested capital.

Investment funds that provide this unique form of financing are known as RBF funds.


– The monthly payments are referred to as royalty payments.

– The percentage of revenue paid by the business to the capital provider is referred to as the royalty rate.

– The multiple of invested capital that is paid by the business to the capital provider is referred to as a cap.


Most RBF capital providers seek a 20% to 25% return on their investment.

Let’s use a very simple example: If a business receives $1M from an RBF capital provider, the business is expected to repay $200,000 to $250,000 per year to the capital provider. That amounts to about $17,000 to $21,000 paid per month by the business to the investor.

As such, the capital provider expects to receive the invested capital back within 4 to 5 years.


Each capital provider determines its own expected royalty rate. In our simple example above, we can work backwards to determine the rate.

Let’s assume that the business produces $5M in gross revenues per year. As indicated above, they received $1M from the capital provider. They are paying $200,000 back to the investor each year.

The royalty rate in this example is $200,000/$5M = 4%


The royalty payments are proportional to the top line of the business. Everything else being equal, the higher the revenues that the business generates, the higher the monthly royalty payments the business makes to the capital provider.

Traditional debt consists of fixed payments. Therefore, the RBF scenario seems unfair. In a way, the business owners are being punished for their hard work and success in growing the business.

In order to remedy this problem, most royalty financing agreements incorporate a variable royalty rate schedule. In this way, the higher the revenues, the lower the royalty rate applied.

The exact sliding scale schedule is negotiated between the parties involved and clearly outlined in the term sheet and contract.


Every business, especially technology businesses, that grow very quickly will eventually outgrow their need for this form of financing.

As the business balance sheet and income statement become stronger, the business will move up the financing ladder and attract the attention of more traditional financing solution providers. The business may become eligible for traditional debt at cheaper interest rates.

As such, every revenue-based financing agreement outlines how a business can buy-down or buy-out the capital provider.

Buy-Down Option:

The business owner always has an option to buy down a portion of the royalty agreement. The specific terms for a buy-down option vary for each transaction.

Generally, the capital provider expects to receive a certain specific percentage (or multiple) of its invested capital before the buy-down option can be exercised by the business owner.

The business owner can exercise the option by making a single payment or multiple lump-sum payments to the capital provider. The payment buys down a certain percentage of the royalty agreement. The invested capital and monthly royalty payments will then be reduced by a proportional percentage.

Buy-Out Option:

In some cases, the business may decide it wants to buy out and extinguish the entire royalty financing agreement.

This often occurs when the business is being sold and the acquirer chooses not to continue the financing arrangement. Or when the business has become strong enough to access cheaper sources of financing and wants to restructure itself financially.

In this scenario, the business has the option to buy out the entire royalty agreement for a predetermined multiple of the aggregate invested capital. This multiple is commonly referred to as a cap. The specific terms for a buy-out option vary for each transaction.


There are generally no restrictions on how RBF capital can be used by a business. Unlike in a traditional debt arrangement, there are little to no restrictive debt covenants on how the business can use the funds.

The capital provider allows the business managers to use the funds as they see fit to grow the business.

Acquisition financing:

Many technology businesses use RBF funds to acquire other businesses in order to ramp up their growth. RBF capital providers encourage this form of growth because it increases the revenues that their royalty rate can be applied to.

As the business grows by acquisition, the RBF fund receives higher royalty payments and therefore benefits from the growth. As such, RBF funding can be a great source of acquisition financing for a technology company.


No assets, No personal guarantees, No traditional debt:

Technology businesses are unique in that they rarely have traditional hard assets like real estate, machinery, or equipment. Technology companies are driven by intellectual capital and intellectual property.

These intangible IP assets are difficult to value. As such, traditional lenders give them little to no value. This makes it extremely difficult for small- to mid-sized technology companies to access traditional financing.

Revenue-based financing does not require a business to collateralize the financing with any assets. No personal guarantees are required of the business owners. In a traditional bank loan, the bank often requires personal guarantees from the owners, and pursues the owners’ personal assets in the event of a default.

RBF capital provider’s interests are aligned with the business owner:

Technology businesses can scale up faster than traditional businesses. As such, revenues can ramp up quickly, which enables the business to pay down the royalty quickly. On the other hand, a poor product brought to market can destroy the business revenues just as quickly.

A traditional creditor such as a bank receives fixed debt payments from a business debtor regardless of whether the business grows or shrinks. During lean times, the business makes the exact same debt payments to the bank.

An RBF capital provider’s interests are aligned with the business owner. If the business revenues decrease, the RBF capital provider receives less money. If the business revenues increase, the capital provider receives more money.

As such, the RBF provider wants the business revenues to grow quickly so it can share in the upside. All parties benefit from the revenue growth in the business.

High Gross Margins:

Most technology businesses generate higher gross margins than traditional businesses. These higher margins make RBF affordable for technology businesses in many different sectors.

RBF funds seek businesses with high margins that can comfortably afford the monthly royalty payments.

No equity, No board seats, No loss of control:

The capital provider shares in the success of the business but does not receive any equity in the business. As such, the cost of capital in an RBF arrangement is cheaper in financial & operational terms than a comparable equity investment.

RBF capital providers have no interest in being involved in the management of the business. The extent of their active involvement is reviewing monthly revenue reports received from the business management team in order to apply the appropriate RBF royalty rate.

A traditional equity investor expects to have a strong voice in how the business is managed. He expects a board seat and some level of control.

A traditional equity investor expects to receive a significantly higher multiple of his invested capital when the business is sold. This is because he takes higher risk as he rarely receives any financial compensation until the business is sold.

Cost of Capital:

The RBF capital provider receives payments each month. It does not need the business to be sold in order to earn a return. This means that the RBF capital provider can afford to accept lower returns. This is why it is cheaper than traditional equity.

On the other hand, RBF is riskier than traditional debt. A bank receives fixed monthly payments regardless of the financials of the business. The RBF capital provider can lose his entire investment if the company fails.

On the balance sheet, RBF sits between a bank loan and equity. As such, RBF is generally more expensive than traditional debt financing, but cheaper than traditional equity.

Funds can be received in 30 to 60 days:

Unlike traditional debt or equity investments, RBF does not require months of due diligence or complex valuations.

As such, the turnaround time between delivering a term sheet for financing to the business owner and the funds disbursed to the business can be as little as 30 to 60 days.

Businesses that need money immediately can benefit from this quick turnaround time.

The M&A and Corporate Finance Advisors at InternetInvestorsGroup.com work with revenue-based financing capital providers to secure growth funding for technology companies.

Contact Us at http://www.InternetInvestorsGroup.com to secure funding for your technology business.

Article Source: https://EzineArticles.com/expert/Kris_Tabetando/1954267

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5 Ways Companies Can Make A Difference

After the past year, many companies are reflecting on their values and how they can make a positive impact in their communities. Finding better ways to interact with the world is not just good business sense, but helps a company become a positive force, leading to a more sustainable, thriving community for everyone.

Collaborating with employees and stakeholders to develop benchmarks that include everyone’s input helps motivate all toward these collective goals. It’s important to review your company’s progress toward your goals on a regular basis.

For example, at Nordstrom, Inc., their 2020 Sharing Our Progress report assesses the company’s accomplishments and reflects on the progress they’ve made against their 2025 goals. Over the next five years, they’re working to achieve specific outcomes, creating new programs in response to customer and employee expectations.

Here are five important ways your business can make positive changes.

1. Environmental sustainability

Customers today desire eco-friendly, sustainable products. From recycling and reducing packaging to energy conservation and decreasing your company’s carbon footprint, changes big and small help the environment.

For example, in 2020, Nordstrom Made brands reduced their single-use plastics by 13 million units. The company also launched BEAUTYCYCLE, the first beauty take-back and recycling program accepting all brands of beauty packaging at a major retailer, with the goal to recycle 100 tons of beauty waste by 2025.

2. Diversity, inclusion and belonging

Companies wanting to ensure that employees and customers know they walk the walk when it comes to diversity and inclusion must review their products, services, hiring and business practices. Making sure everyone is welcomed within the company is vital to ensuring you’re serving the entire community.

One way to demonstrate your commitment to diversity and inclusion is to champion underrepresented brands. Last year, Nordstrom committed to $500 million in sales from Black and Latinx brands by 2025, and they made it easier for customers to find Black-founded brands online by launching a new category.

To better serve all their customers, the company also introduced Inclusive Beauty, a new category featuring a curated assortment of beauty products for everyone — regardless of skin or hair type, tone, complexion or texture.

Additionally, diversity should show up at all levels of a company. For instance, Nordstrom’s leadership is 60 percent women and its Board of Directors is 45 percent women, nearly 30 percent of whom are people of color.

3. Giving back to the community

For any size business, there are many ways to give back. From restaurants providing free meals to frontline workers to companies retooling their manufacturing setup to create face shields, giving back has been one of the most inspiring aspects of the pandemic.

Companies can also encourage employees to volunteer by offering days off for volunteerism, or to give to charities by offering a donation match. In 2020, Nordstrom gave more than $11 million, with $3.5 million to 3,615 causes through their employee matching gift program.

4. Supporting employees

Because the pandemic has posed so many challenges, companies wanting to retain talent need to ensure their business is a positive, nurturing place to work, even from home. Supporting employees is not just the right thing to do, it also helps your business grow and thrive.

Nordstrom has worked to ensure that their supply chain employees on the front lines were supported with the safest possible work environments, with enhanced pay and wellness resources.

Listening to employee feedback, the company also expanded flexible work solutions and added new caregiving benefits and mental health resources to help employees balance competing demands of work and family. Flex-work solutions included “no meeting” blocks, core work hours, reduced/part-time hours and job sharing. To help employees impacted by the pandemic, they also enhanced leave of absence options and introduced new benefits for caregivers — including back-up childcare options and elder care resources.

5. Global responsibility

While for some businesses global responsibility may seem daunting, it’s become clear that issues in one part of the world can affect people — and businesses — half a world away. It’s more important than ever to be aware of where the products you sell come from, and who is impacted by their creation.

Last year, 32 percent of Nordstrom Made products were manufactured in factories that invest in women’s empowerment, reaching 40,000 workers. Making a commitment to further empower women in developing countries is one crucial way to ensure your business is having a positive influence.

Learn more about how Nordstrom is working to make a difference at NordstromCares.com.

Why Companies With No Real Asset Value So Much: 7 Essential Elements They Consider

Do you actually consider that a company with no real asset can value so much as $40 billion? Well, you are going to find out in this short article today.

Today, I believe you will benefit from some of the simplest elements in valuing a company. So let’s begin, the 7 essential elements most companies consider when they value themselves based on milestones.

I was searching for a topic this morning when I came across a discussion on Reddit “How Companies such as Uber and Ashley Madison Value Themselves”? The discussion caught my attention when one of the participants said, “I was reading about Ashley Madison scandals and how it has sales of $115 million but values itself at $1 billion.

Even a company like Uber that has no real asset value at $62.5 billion, where did they get those values from?” and I know that some of you out there might have also wondered how they got those values?

Well, most companies value themselves based on their milestones. Let me give you one example, if you watch Uber news you will see that they always talk about their milestones.

The company proudly announced that they have reached the new milestone on April 14, 2015. Wayne Ting said, “the number of Bay Area driver-partners on Uber platform exceeded 20,000 for the first time… And we were not even halfway there just one year ago”.

Then again on June 28, 2015, they also exceeded their milestone in South Africa, and this year 2016, their target is to hit another milestone in China. Okay, in that case, let’s briefly brush over the 7 essential elements that most companies look at when they value themselves:

#1: Business plan – The number one thing they would be proud of is that they have a business plan. They know the purposes of a business plan, that you can use it when you want to raise funds. You can also use it as a marketing tool and as a planning tool.

#2: Money – Money is a very important tool in every business, you know that. They go and raise some cash.

#3: People – They also hire people, and Remember the number 1, 2, 3 things investors look at when they value a company is people.

#4: Products – Another thing is that they build their products, and take them to the market. It might just be a company’s app or something like that.

#5: Customers – When there are no customers, there would be no sales, and when there are no sales definitely there would be no profit. They carefully figure out who their major customers are, or their target market. They may base their target on demographics, or university students of lower or upper grade, geographical or what have you.

#6: Marketing – This is very, very important. Marketing is the propeller that propels their products to the desired market, I mean the right market. It also helps your brand name gain exposure, when handled effectively.

#7: Risk – So what most venture capital firms do is that they look at a company’s risk factors, if the stage of the risk of the company is less, generally, they worth more money on all those stages.

Conclusion: what else do you think that was not added to the list of the 7 essential elements? In one of my training articles we talked about business plan purposes, money, people, customers, products, marketing and risk. Share this content with your friends, and have a nice day.

Article Source: https://EzineArticles.com/expert/Onyebuchi_Isu/2210559

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