What are the different types of lending organizations that lend to businesses?
Traditional banks, various finance companies, factors, funds and hedge funds should all be considered. There are a number of different entities that may look similar on the surface, but it is important to know how they differ. How do they differ? Banks are regulated entities. They have to be somewhat similar in their lending methods. The rest are unregulated. They each have different criteria on how they look at things. These include rates, payback plan, timing and various financial and operating covenants. With a full gamut of different lenders, each with their own needs and requirements, the uninformed CEO or owner can get in a situation that is very difficult to handle. What can a business owner do in preparation before approaching a financing source? It is critical to know what the financing source is willing to lend and under what terms. Can you fulfill everything that is going to be requested? Are there intercompany, stockholder or receivables issues that may come into play? Do y
