Summary: Small middle-market companies have fewer financial options than their larger counterparts. Large companies have choices comparable to those of small companies. However, they benefit from better pricing. This article discusses cash flow financing options available to lower middle-market companies. It also includes options that are available to distressed companies. We cover the following: 1. […]
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Navigating Asset-Based Loans: Small Business Guide
Asset-based loans (ABLs) enable companies to get financing by leveraging their accounts receivable, inventory, and other assets. These loans are a popular option for companies due to their flexibility, simpler qualification requirements, and easier compliance. This guide helps business owners understand how ABLs work, which assets can be financed, what lenders look for, and how […]
Navigating Purchase Order Financing: Small Business Guide
Purchase order (PO) financing has become a popular option for growing resellers and distributors. It helps cover supplier expenses associated with large purchase orders. However, PO financing can be challenging to understand at first. It follows a different structure and has different requirements than typical financial products. This article helps small business owners navigate the […]
How Risky is Invoice Factoring?
Summary: All forms of business financing involve risk, and invoice factoring is no exception. In this article, we outline the primary risks associated with factoring and provide detailed strategies to mitigate your risk. These strategies will improve your chances of success. We cover the following: 1. What is invoice factoring? Invoice factoring allows companies to […]
Borrowing Base Calculator for Asset-based Loans
The following calculator helps estimate the available funds in an asset-based loan (ABL). You can modify any editable field, and the calculated values will update automatically.For a detailed explanation of borrowing base certificates and the meaning of each field, read “How Does a Borrowing Certificate Work?“ How to use the calculator Enter or modify the […]
Financing Options for Distressed Lower Middle-Market Companies (“Special Assets”)
Summary: Middle-market companies that are out of compliance with their lenders are typically assigned to the Special Assets group. Usually, these companies must find a new lender as part of their workout process. Few lenders finance distressed companies in this market segment. Consequently, finding a replacement lender can be a significant challenge for lower middle-market […]
Cash Conversion Cycle Calculator
The cash conversion cycle measures how long it takes your company to sell it’s inventory. collect invoices, and pay vendors. It’s an important metric because it shows how efficiently your business turns operating activity into cash. An increasing cash conversion cycle may indicate that cash is tied up for longer. This can happen because of […]
DSO Calculator
Days Sales Outstanding (DSO) measures how long your customers take to pay their invoices, on average. It’s an important metric because it provides a general gauge of your collections performance. An increasing DSO may indicate collection delays and potential cash flow problems. Formula: DSO = (Average Accounts Receivable ÷ Total Credit Sales) × Number of […]
How Does a Borrowing Base Certificate Work?
A borrowing base certificate is a document that a company uses to draw funds from its asset-based loan (ABL). The certificate is typically used in ABLs secured by accounts receivable since these loans are structured as revolving lines. This article explains how borrowing certificates work and covers the following: 1. What is a borrowing certificate? […]
DPO Calculator
Days Payable Outstanding (DPO) measures how long your company takes to pay its suppliers, on average. It’s an important metric because it provides a general gauge of how your business manages supplier payments and cash flow. An increasing DPO may indicate that your company is taking longer to pay bills. This can improve short-term cash […]