A/R Factoring – Accounts Receivable factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount. A business will sometimes factor its receivable assets to meet its present and immediate cash needs.
Bridge Financing – Bridging Financing or Bridge Capital is a short-term financing option. They are used to ‘bridge’ a gap between events (e.g. leaving one lender and going to another). Or, it can simply act as a short-term loan in pressing circumstances. Typically taken out for a period of 2 weeks to 18 months years pending the arrangement of larger or longer-term financing.
Equipment Leasing – A lease is in essence an extended rental agreement under which the owner of the equipment allows the user to operate or otherwise make use of the equipment in exchange for periodic lease payments. In leasing terminology, the owner is the lessor, the user is the lessee. Generally, there is an end-of-term purchase option (also known as a residual) which allows the Lessee to obtain ownership at the end of the lease. Some tax benefits can be associated with this type of financing.
Sale Leaseback – or Leaseback, short for ‘sale-and-leaseback,’ is a financial transaction, where one sells an asset and leases it back for the long-term; therefore, one continues to be able to use the asset but no longer owns it. The transaction is generally done for fixed assets, notably equipment or real estate. Leaseback arrangements are usually employed because they confer financing, accounting or taxation benefits.
Equipment Financing – Any method of extending capital to businesses for the purpose of acquiring equipment. Financing methods include equipment leasing, as well as sale-leaseback and other products wherein the collateralized existing equipment is used to conserve or raise cash for the business. Typically, it involves a lender giving a business finance that is secured by a piece of equipment.
PO Financing / Inventory Management – Purchase Order financing is a short-term commercial finance option that provides capital to pay suppliers upfront for verified purchase orders. Businesses avoid depleting cash reserves or declining an order because of cash flow challenges. It allows companies to accept unusually large orders and adjust the loan basis up/down quickly to meet needs. If order volume drops, there’s no long-term commitment so they can stop using it at any time.
Mezzanine Debt – A form of risk capital that is junior to senior debt and in priority to equity. It is attractive to equity owners because mezzanine debt can be recalled and cancelled by the company through repayment, it also avoids unnecessary dilution and cost from new equity. Mezzanine Debt is used for adolescent and mature companies.
Subordinated Debt – The highest ranking liability on a company’s balance sheet that takes priority over other secured, unsecured or otherwise more junior debt. This concept is often best illustrated by the divestiture process. In the case of a business sale, a secured creditor is paid in first priority from any asset proceeds. Afterwards, other junior creditors, ranked in priority of security or interest, will receive any residual asset proceeds. Once all debt and creditors are paid, any balance and goodwill value can be paid out to equity holders in priority.
Service Agreement Financing / Contract Financing – Growth revenue financing or the financing of future revenues or cashflow. An opportunity for companies to access working capital by using the proceeds from an in-progress or upcoming project as collateral for a loan
Working Capital Loans – A working capital loan is a loan that has the purpose of financing the everyday operations of a company. Working capital loans are not used to buy long-term assets or investments and are instead used to cover accounts payable, wages, etc. Many of the products shown here on this page can fall under this category.
Start-Up Business / Venture Capital Loans – Startup or growth equity capital or loan capital provided by private investors (the venture capitalists) or specialized financial institutions (development finance houses or venture capital firms). Also called risk capital. Venture capital is a type of funding for a new or growing business.
Equity – Equity is the most expensive form of capital. It is typically held in the form of common or preferred stock. Equity is also normally subject to a shareholder agreement which will provide for any voting rights that the equity holders may have. From an accounting perspective equity is the positive or negative remainder of assets after deducting liabilities. An investor holds equity in anticipation of income from dividends and capital gains. Equity is the most common form of risk capital. Equity can be privately or publicly sourced via our private equity partners or groups and through public markets.
SR&ED AND TAX CREDIT FINANCING – The Scientific Research and Experimental Development (SR&ED or SRED) program is a federal tax incentive program that encourages Canadian businesses of all sizes and sectors, to conduct research and development in Canada. The SR&ED program provides companies with both refundable and non-refundable tax credits for eligible R&D conducted in Canada. The SR&ED tax credit often appears as an intangible asset on a company’s balance sheet. The majority of financial institutions do not have the understanding to place a hard value on this intangible asset. This provides an opportunity for SR&ED experts to unlock the value of the SR&ED tax credit through the loaning or factoring of the asset.
“Learn more by clicking on each bubble. Confused or have more questions? Contact us, we love to help and help you navigate the corporate financing landscape. “
You are a business owner or involved with a corporation or business entity. You require capital for launch, growth, restructuring, realignment, working capital or secure new opportunities or strategy.
How We Can Help:
Danilo Terra Capital Strategies Corp. can help you navigate and uncover the best financial and capital strategies to help you achieve your goals. The strategies above are only part of what exists to help your business in any stage or level of financial health. Contact us here with your questions or concerns.