By Lou Wallace
Where to find working capital is a problem that plagues all business owners. Whether to seek an “Angel” Investor or find a commercial small business loans through an Asset Based Lender or traditional banking source. The difference is dramatic.
In both instances a debt is created; however a Lender doesn’t take a percentage of your company in return for the risk. A start up business may need “seed” money but once it is successful, and the Investor has been repaid, the business owner has a partner, whether they want one or not.
Lenders (Asset Based, Factor, Banks and SBA small business bank loans) on the other hand, charge interest or a fee for the financing they provide. Once the debt is repaid the transaction can be over or can turn into a long running and mutually rewarding experience.
The business owner should remember that when borrowing money you only pay the contract rate for the loan, while with an investor you typically share the profits of the company. If the company is profitable the investor will likely earn much more than the cost of funds for a loan.
Performance Funding Group, LLC is a locally owned and privately funded asset based lender who has been providing several different loan products since 1997. Lou Wallace has been working in commercial loans since 1971. Lou Wallace can be reached at 602-912-0200. www.performancefunding.com