Rules of Thumb for AMOUNTS & TIMELINES associated with different types of capital

(*found at bottom of Intake Form marked ‘Submit Policy’ on the LEFT side of homepage)

The following is Finance 101. So for those who already know this bear with us. But day in and day out our call center gets these 3 questions despite guidelines that have been relatively the same for decades. Many inquirers still believe that applying for tens of millions of dollars does not require meeting approval criteria and comes cash in a brown paper bag in 24 hours. The following chart provides a much needed reality-check.

FIRST:
Rule of thumb for AMOUNTS of capital based on TYPES:

(1) Micro-finance – as small as $50

(2) Incubators – $20K (Specific Incubators have been mentioned previously 6x on this blogfeed to include the adjacent post today)

(3) Seed capital – $50K (about same for technology transfer funding too)

(4) Unsecured lines of credit – $100K

(5) Invoice factoring – $100K+
comes in different forms; purchase orders (P/O’s), accounts receivables (A/R’s), & government contracting. All fast and cap usually upwards to $10M

(6) Angel group investors – $250K (Typical cap according to SBA)

(7) 35% down hard money/Collateralized debt capital – $1M+ (about the same as commercial real estate funding)

(8) Mezzanine venture capital – $5M+ (Mezzanine means growth phase)

(9) Monetization of SBLC’s/BG’s/SBLOC’s – $10M+ Other asset classes include stock/bonds, antiques, museum-grade items, commodities, etc.

SECOND:

While we are at it might as well cover TIMELINES associated with TYPES of capital too:

(1) Asset-based funding – under 30 days

(2) Debt capital – 30 – 90 days
(except for hard money which takes less than 30 days)

(3) 24 types of Equity capital – 180 – 360 days
(especially when filing/underwriting/offering PR for an IPO is involved. Compose, edit, file & registering a PPM alone can take 6 weeks prior to even beginning any telemarketing phase)

(4) Technology transfer funding – 6 – 24 months (government related funding has 1 or 2 phases for approval)

THIRD:

Importance of SEQUENCE in packaging capital

Lots of people like to package the sequence of capital backwards

Like time consuming equity based on securities they don’t have to legally sell equity

Rather then the industry-standard more time efficient and much cheaper approach of;

(a) asset-based funding first (ABL), then (b) debt capital,

then (c) government collateral/credits, and last (d) equity

 

You must have securities to sell equity… lack of is called securities fraud.

– – – – – –

We are closed November 23-30 and December 15-31.
If you have an ABL request deadline… be sure to plan ahead.

Jeffrey D. Allen, CEO,
http://www.Globalcrossroadscapital.com
US Vet-owned, SBA-certified, DUNS-listed IR media firm

Comp consultation 4000+ finance topic blogfeed
http://SinCityFinancier.wordpress.com

skype phone: SinCityFinancier
social media: Top 50 sites

(* If you wish to be a client proceed to the CONTACT page at the top of the blogfeed above)

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