Alternative Financing Vs. Venture Capital: Which Option Is Best for Boosting Working Capital?

There are several potential financing options available to cash-strapped businesses that need a healthy dose of working capital. A bank loan or line of credit is often the first option that owners think of – and for businesses that qualify, this may be the best option.

In today’s uncertain business, economic and regulatory environment, qualifying for a bank loan can be difficult – especially for start-up companies and those that have experienced any type of financial difficulty. Sometimes, owners of businesses that don’t qualify for a bank loan decide that seeking venture capital or bringing on equity investors are other viable options.

But are they really? While there are some potential benefits to bringing venture capital and so-called “angel” investors into your business, there are drawbacks as well. Unfortunately, owners sometimes don’t think about these drawbacks until the ink has dried on a contract with a venture capitalist or angel investor – and it’s too late to back out of the deal.

Different Types of Financing

One problem with bringing in equity investors to help provide a working capital boost is that working capital and equity are really two different types of financing.

Working capital – or the money that is used to pay business expenses incurred during the time lag until cash from sales (or accounts receivable) is collected – is short-term in nature, so it should be financed via a short-term financing tool. Equity, however, should generally be used to finance rapid growth, business expansion, acquisitions or the purchase of long-term assets, which are defined as assets that are repaid over more than one 12-month business cycle.

But the biggest drawback to bringing equity investors into your business is a potential loss of control. When you sell equity (or shares) in your business to venture capitalists or angels, you are giving up a percentage of ownership in your business, and you may be doing so at an inopportune time. With this dilution of ownership most often comes a loss of control over some or all of the most important business decisions that must be made.

Sometimes, owners are enticed to sell equity by the fact that there is little (if any) out-of-pocket expense. Unlike debt financing, you don’t usually pay interest with equity financing. The equity investor gains its return via the ownership stake gained in your business. But the long-term “cost” of selling equity is always much higher than the short-term cost of debt, in terms of both actual cash cost as well as soft costs like the loss of control and stewardship of your company and the potential future value of the ownership shares that are sold.

Alternative Financing Solutions

But what if your business needs working capital and you don’t qualify for a bank loan or line of credit? Alternative financing solutions are often appropriate for injecting working capital into businesses in this situation. Three of the most common types of alternative financing used by such businesses are:

1. Full-Service Factoring – Businesses sell outstanding accounts receivable on an ongoing basis to a commercial finance (or factoring) company at a discount. The factoring company then manages the receivable until it is paid. Factoring is a well-established and accepted method of temporary alternative finance that is especially well-suited for rapidly growing companies and those with customer concentrations.

2. Accounts Receivable (A/R) Financing – A/R financing is an ideal solution for companies that are not yet bankable but have a stable financial condition and a more diverse customer base. Here, the business provides details on all accounts receivable and pledges those assets as collateral. The proceeds of those receivables are sent to a lockbox while the finance company calculates a borrowing base to determine the amount the company can borrow. When the borrower needs money, it makes an advance request and the finance company advances money using a percentage of the accounts receivable.

3. Asset-Based Lending (ABL) – This is a credit facility secured by all of a company’s assets, which may include A/R, equipment and inventory. Unlike with factoring, the business continues to manage and collect its own receivables and submits collateral reports on an ongoing basis to the finance company, which will review and periodically audit the reports.

In addition to providing working capital and enabling owners to maintain business control, alternative financing may provide other benefits as well:

It’s easy to determine the exact cost of financing and obtain an increase.
Professional collateral management can be included depending on the facility type and the lender.
Real-time, online interactive reporting is often available.
It may provide the business with access to more capital.
It’s flexible – financing ebbs and flows with the business’ needs.
It’s important to note that there are some circumstances in which equity is a viable and attractive financing solution. This is especially true in cases of business expansion and acquisition and new product launches – these are capital needs that are not generally well suited to debt financing. However, equity is not usually the appropriate financing solution to solve a working capital problem or help plug a cash-flow gap.

A Precious Commodity

Remember that business equity is a precious commodity that should only be considered under the right circumstances and at the right time. When equity financing is sought, ideally this should be done at a time when the company has good growth prospects and a significant cash need for this growth. Ideally, majority ownership (and thus, absolute control) should remain with the company founder(s).

Alternative financing solutions like factoring, A/R financing and ABL can provide the working capital boost many cash-strapped businesses that don’t qualify for bank financing need – without diluting ownership and possibly giving up business control at an inopportune time for the owner. If and when these companies become bankable later, it’s often an easy transition to a traditional bank line of credit. Your banker may be able to refer you to a commercial finance company that can offer the right type of alternative financing solution for your particular situation.

Taking the time to understand all the different financing options available to your business, and the pros and cons of each, is the best way to make sure you choose the best option for your business. The use of alternative financing can help your company grow without diluting your ownership. After all, it’s your business – shouldn’t you keep as much of it as possible?

Top 9 reasons to plan your stay at the Taj Mahal Palace in Mumbai

Arriving and staying in the city of Mumbai is a very rewarding experience for the people especially if they are planning their stay in a very good quality hotel. There is no need to worry because Mumbai is a city that is inclusive of different kinds of hotels that are ultimately successful in terms of providing the people be top-notch quality facilities and features and one such great hotel is Taj Mahal Tower Mumbai. Staying into Taj Mahal Hotel is a dream of many people because of multiple reasons and some of those reasons why people prefer this particular hotel are mentioned as follows:

Suggested article: Taj Mahal Tower Mumbai Hotel Price, Address & Reviews

The hotel comes with a worry-free experience for the guests: In case the people have to choose everything about the trip on their own for example transportation, stay and several other kinds of things then it can be a very tiring experience. But whenever one will go with the option of allowing the hotels to choose and arrange the transportation then one can enjoy a very worry-free trip very easily. The moment when the people will be walking outside they will find the hotel the person of hotel staff holding the placard and they will escort to the transportation being arranged by them. The hotel is very much successful in terms of enhancing the experience for the people so that all the guests can have a worry-free experience because this particular hotel always pays proper attention to the demands of the guests.
The welcoming experience is too good: The moment when the people will walk through the door of the hotel they will be witnessing one of the finest and largest hotel companies of India as well as Asia. Staying in this particular hotel is a very good experience and the people will be greeted with chilled towels, the tastiest non-alcoholic welcome drink, and the flower lei.
It comes with a high-quality museum and art collection: The hotel also pays proper serious attention to the best quality art collection and everywhere people will be looking there will be a masterpiece in the form of painting, sculpture, or artifact and the best part is that everything has been created by the Indians only. There are more than 300 pieces in this particular hotel and along with all these kinds of things; the hotel is itself no less than a tourist destination. Hence, whenever people will plan their stay in this particular hotel they will be availing multiple advantages in the long run.
The rooms are amazing: Every room comes with beautiful new interiors and there are different kinds of categories of rooms and each one of them is ridiculously beautiful. Every room has been designed differently so that people have a top-notch quality experience all the time. The architecture has been paid proper attention and the interior design provided by the hotels is amazing. Hence, whenever the individuals are interested in avail the advantages of best quality interior designing they must go with the option of staying into this particular hotel so that they can enjoy on the trip.
The food is breathtaking: The hotel comes with 11 restaurants and 24 hours of room service for the people. The on-site restaurants are many and they help in providing the people with different kinds of cuisine options, for example, Arabic, Japanese, Mediterranean, western dishes, Indian, Chinese, French, Italian and several other options so that taste buds of every guest are perfectly satisfied and there is no issue to any of the guests in the form of food items. Hence, the variety and flexibility provided by these kinds of cuisine options are top-notch.
The hotel comes with the best service in the industry: Taj hotels are well-known across the globe for the hospitality and services provided by them and Taj Mahal Tower Mumbai is also a very important member of this list. This particular hotel treats their entire staff very well and most of them have been working here for many years and are very much happy. The waiters serve the breakfast perfectly to the people and one will get everything which one normally expects at a five-star international hotel breakfast buffet. Hence whenever the people are interested to take the best possible advantage of top-notch quality hospitality and different kinds of services then depending upon staying into this particular hotel is very much important. To have proper access to delicious and authentic Indian dishes you must plan your stay in the Taj Mahal Tower Mumbai.
The hotel comes with a very good pool: Whenever the individuals are interested to relax and enjoy a good time with them then they can take complete advantage of the pool and several other kinds of facilities provided by the Taj hotel. Taking a dip in the pool is very much relaxing and the best part is that people can even go to the gym after it. Hence, this point is very much successful in terms of making the vacation the best possible experience for the people.
Everybody prefers to stay here: Another very important reason why you should plan your trip to stay in this particular hotel only because this hotel is the first preference of all the celebrities and heads of the states and many of them have already stayed over there. The list is very long and includes President Obama, Secretary of State Hillary Clinton, John Lennon, Oprah Winfrey, and several other famous personalities. Hence, witnessing great interior and architecture is a great idea with the help of this concept and you must always fulfill your overall dream of staying it to a very lovely place by booking a room in Taj Mahal Tower Mumbai.
The location of the hotel is too good: The Taj Mahal Palace is located at the most famous landmark of the city which is the Gateway of India and everything else worth checking in Mumbai is only 10-15 minutes taxi ride from here hence, the prime location of the hotel is a great reason why you should prefer booking a room here.
Hence, for your next trip if you are planning to visit Mumbai then you must book a room in Taj Mahal Tower Mumbai to avail of all the above-mentioned advantages.

Savile Row Tailors – Pioneering In Men’s Fashion

Great Britain’s rich history is not just limited to tales surrounding the royal family or the conquests that saw it become one of the supreme powers of the world. In fact, the centuries of supremacy that this country has enjoyed symbolize the pinnacle it achieved in almost all realms of life, may it be trade, governance, literature, education, art or fashion. When we talk about the British contributions towards the world of style and fashion, there is a centuries old history associated with it as well. Among the most prominent representatives of Britain’s fashion industry are the Savile Row tailors, whose master craftsmanship is known to all and sundry around the world.About Savile Row Tailors:
It would not be wrong to regard Savile Row as the hub of men’s custom-made suiting. This is a status it has enjoyed for the past couple of centuries and it is to the credit of the artisans working here that the world has come to recognize Britain as a trendsetter in the fashion industry. Although the Row also caters to the demands of its female clientele, its widespread popularity primarily comes from its strong adherence to men’s apparel. In fact, the craftsmen you find on the Row will proudly present a list of iconic male figures for whom they have had the privilege of creating statement pieces for.Who Is The Best Among The Savile Row Tailors?
To decide which of the Savile Row’s designer outlets have an edge over the others is a difficult question to answer and would mainly depend on the taste the buyer has. The choice is also difficult to make because each of these fashion solution providers have their own niche and design strengths that attract different categories of clients, ranging from celebrities to entrepreneurs. Some of the most sought after names in this Mayfair area include:Spencer Hart:
Although counted among the recent entrants to Savile Row, Spencer Hart quickly became popular among men who are on the lookout for modern cuts with hassle-free designs. The shop considers itself to be the creator of ‘cool’ factor in men’s suiting and has been successful in remaining true to its label. Presenting the perfect fusion of trendy, elegant and sassy, Spencer Hart impresses its customers with each collection by introducing the flawless minimalist yet stylish dark-finish suiting styles.Gieves And Hawkes:
If you are on the lookout for suits that incorporate the old-age British class and finesse, you would definitely be impressed by what Gieves and Hawkes have to offer you. Being one of the earliest outlets on the street, Gieves and Hawkes have maintained their traditionalist British styles, ranging from military uniforms to vintage style suits.Richard James:
Richard James has separate outlets for its readymade and bespoke collections. It is to Richard James’ credit that even though the suits are styled with impressive cuts and distinctive silhouettes, they do not appear to have a pompous look. Innovations in designs and the creative use of colours adds stars to the outlet’s portfolio.