Home: Patents:
Inventors Handbook
Public Financing: Allowing the public to buy shares
in the company on the public market. These shares get traded in
the recognized stock exchanges. But a company cannot simply decide
to issue and/or transfer shares to investors. U.S. Securities and
Exchange Commission (SEC) has laid out detailed rules and regulations
to protect investors and maintain the integrity of the securities
markets. There is specific legislation governing how and when companies
may go public, and restrictions on the transfer of shares, number
of shareholders and advertisement of shares. In general, going public
is really only a viable option for well-established companies. If
you think going public is right for your company, begin by talking
to a financial advisor or lawyer specializing in this area. For
more information related to public issue of shares in US, please
visit www.sec.gov
Strategic Alliances: Forming an alliance with another company that
will benefit from your products or services. The major resources
to search for potential strategic alliance partners include trade
directories and patent publications. Strategic Alliances may be
formed with large corporations, research universities, community
groups and other entities. The support can be in the form of capital,
human resources, office space, intellectual property etc.
Debt Financing
Debt financing refers to borrowed money, which has to be repaid
over a specified period of time, with interest. Lenders charge interest
for loaning of money without a share or equity in the business.
Generally debt financing is approved against assets like house or
property as security. There are numerous sources of debt capital,
including commercial banks, credit unions, the government, credit
card companies, community organizations, and specialty finance companies.
Note: Whether loan support is needed or not, take particular care
to start a banking relationship. This reference support will be
of immense help when looking for financial assistance in the future.
Commercial banks: Commercial banks are the most common and visible
lenders. Though they accept collateral for business loans, loan
approval rests on your ability to repay the loan as shown by your
profit projections, management skills and your personal record.
Commercial finance companies: If you cannot secure finance from
a bank, you can try one of the many commercial finance companies.
They rely on the quality of your collateral and hence, commercial
finance companies will be of no use, if you do not have substantial
personal assets or collateral.
The main types of commercial loans, include
a. Short-term commercial loans (30 to 90 days) - Normally used by
small businesses for business operation expenses such as rent, insurance,
advertising, inventory or salaries. They are often unsecured.
b. Intermediate-term loans (1-5 years) – Normally used to
fund purchase of business equipment, fixed assets or provide working
capital support. They are usually secured by the new equipment or
business assets.
c. A long-term commercial loan (more than 5 years) – These
loans are generally secured and are used for business expansion
– new buildings, acquisition of an existing business, purchase
of real estate
.
d. Line of Credit – The banks set an upper limit of loan at
a specified interest rate and allow the business to borrow against
it when needed. The repayment would be over a longer period of time
and the interest charged only on the amount borrowed.
e. Factoring of Receivables – Allows the bank to control the
collection of the company's accounts receivable, either through
direct deposit or through monthly loans as receivables are presented.
f. Receiving Credit – To support businesses, like contracting
companies that are in up and down cycles. This type of loan should
not be used for the purchase of assets
 <
Previous PageNext
Page>
|
|
Helping
Businesses and Entrepreneurs Nationwide
