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Most lending institutions only provide financial support to companies who meet very conservative guidelines.

On the other hand, venture capitalists and private investors always demand equity and participation in the management of your company. However, many of the cash flow problems that small companies run into are due to how corporate invoices are paid.

Additionally, the invoices cannot be secured by liens from other companies or government entities.

Most financing lines can be deployed quickly – in a week or so.

At this point, the company will have generated profits from the busy season, and will now be able to use those profits to repay the loans it took out to finance operations during the busy season. See Also: Loan Agreement Collateralized Debt Obligations When is an interest rate not as important in selecting a loan?

Calling a loan self-liquidating is just a complicated way of saying that it eventually gets paid off. For example, the popular 30-year fixed rate mortgage is a self-liquidating loan.

Most commercial clients demand net 30 day terms as a condition of working with your business.

And as a small business, you can either work with it or .

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It covers the remaining 20%, though the fees are subtracted from that payment. You can use this type of funding on an ongoing basis by financing a portion of your receivables.The company borrows money to buy more materials to take advantage of the increasing demand of the busy season.Then when business slows down the company will have less of a need for borrowed funds to finance short-term assets like inventory accounts – the need for financing will decline as the need for inventory declines. “Analysis for Financial Management”, Mc Graw-Hill Irwin, New York, NY, 2007.The term can apply to a company that experiences seasonal fluctuations in business.During the busy season when business is booming the company needs to borrow money to finance short-term assets such as inventory and accounts receivable.

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