Houlihan Smith Advisors Give Financial Info for Small Businesses
When starting to think about opening up your own business, one of the most important decisions you can make as a new small business owner is obtain capital in order to get everything going. The process of obtaining capital can be risky, and should be carefully considered, and all options should be weighed before a decision is made. A wise owner will realize that this decision needs as many options as possible, and will consider talking to a Houlihan Smith financial advisor before making decisions.
Some of the capital obtaining options small business owners should talk to their Houlihan Smith advisor about includes Angel investors, accounts receivable financing and friends and family.
A Houlihan Smith advisor can explain how an Angel investor can be beneficial to your business. There are angel investment groups who focus on the growth of certain communities and will invest in small businesses, and the Houlihan Smith advisor will help you find the best way to find an angel investment group near to you.
Talk to your Houlihan Smith consultant about friends and family, the most conventional ways of financing small businesses. Many entrepreneurs have been able to leverage existing relationships and obtain funding, either as a loan or as a capital investment, for their businesses.
However, the business owner could risk the relationship if things do not go as expected and the business defaults and these transactions are usually done with little formality and without written agreements. Your Houlihan Smith advisor will probably elect to use this funding option only after consulting an attorney and drawing some formal documents that describe the intent and responsibilities of each party.
Accounts receivable financing enables a business to sell their slow paying accounts receivable to a financial company, who in turn pays for the invoices within 48 hours. After the sale, the financial company waits to be paid for the invoices. A key feature of factoring is that the factor will take the credit strength of the business’ customers. This means that a small company with little or no credit can leverage a strong roster of clients, sell their invoices and get funding very quickly.