When you read this entire blog post proceed to the heading above and READ THIS then the CONTACT page
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(*”Do you understand the differences in TIMELINES associated with different TYPES of capital”… is one of the last questions found at bottom of Intake Form marked ‘INTAKE FORM’ on the LEFT side of homepage. This chart follows the Intake Form too)
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 meetingfundingapprovalcriteria.com and “any type of capital will do” cash in a brown paper bag in 24 hours. The following chart provides a much needed reality-check.
- Asset-based funding is the only TYPE of capital that qualifies for FEE Option #2 or commission. If the transaction has any NON-broker tasks involved like advisory services or marketing or government relations and/or CANNOT BE CLOSE IN UNDER 30 DAYS THEN DISREGARD Fee Option #2 on “4 FEE OPTIONS” page.
- This purpose of this blog post is How to Predict typical capital AMOUNTS based on category + TIMELINES to CLOSE + proper SEQUENCE OF PACKAGING capital
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 to $500K+ (Contingent on credit score 700+)
(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.
While we are at it might as well cover typical TIMELINES TO CLOSE associated with TYPES of capital too:
(1) Asset-based funding – under 30 days
(2) Debt capital – 40 to 120 days
(except for hard money which takes less than 30 days)
(3) 24 types of Equity capital – 180 to 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) PPM’s have no tradable market value. EB-5 finance may take over 1 year depending how much capital is required. Especially if it is $100M to $1B.
(4) Technology transfer funding – 6 to 24 months (government related funding has 1 or 2 phases for approval)
Importance of proper 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.
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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,
US Vet-owned, SBA-certified, DUNS-listed IR media firm
Comp consultation 6000+ finance topic blogfeed
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)