Alternative Financing Vs. Venture Capital: Which Option Is Best for Boosting Working Capital?

There are several potential financing options available to cash-strapped businesses that need a healthy dose of working capital. A bank loan or line of credit is often the first option that owners think of – and for businesses that qualify, this may be the best option.

In today’s uncertain business, economic and regulatory environment, qualifying for a bank loan can be difficult – especially for start-up companies and those that have experienced any type of financial difficulty. Sometimes, owners of businesses that don’t qualify for a bank loan decide that seeking venture capital or bringing on equity investors are other viable options.

But are they really? While there are some potential benefits to bringing venture capital and so-called “angel” investors into your business, there are drawbacks as well. Unfortunately, owners sometimes don’t think about these drawbacks until the ink has dried on a contract with a venture capitalist or angel investor – and it’s too late to back out of the deal.

Different Types of Financing

One problem with bringing in equity investors to help provide a working capital boost is that working capital and equity are really two different types of financing.

Working capital – or the money that is used to pay business expenses incurred during the time lag until cash from sales (or accounts receivable) is collected – is short-term in nature, so it should be financed via a short-term financing tool. Equity, however, should generally be used to finance rapid growth, business expansion, acquisitions or the purchase of long-term assets, which are defined as assets that are repaid over more than one 12-month business cycle.

But the biggest drawback to bringing equity investors into your business is a potential loss of control. When you sell equity (or shares) in your business to venture capitalists or angels, you are giving up a percentage of ownership in your business, and you may be doing so at an inopportune time. With this dilution of ownership most often comes a loss of control over some or all of the most important business decisions that must be made.

Sometimes, owners are enticed to sell equity by the fact that there is little (if any) out-of-pocket expense. Unlike debt financing, you don’t usually pay interest with equity financing. The equity investor gains its return via the ownership stake gained in your business. But the long-term “cost” of selling equity is always much higher than the short-term cost of debt, in terms of both actual cash cost as well as soft costs like the loss of control and stewardship of your company and the potential future value of the ownership shares that are sold.

Alternative Financing Solutions

But what if your business needs working capital and you don’t qualify for a bank loan or line of credit? Alternative financing solutions are often appropriate for injecting working capital into businesses in this situation. Three of the most common types of alternative financing used by such businesses are:

1. Full-Service Factoring – Businesses sell outstanding accounts receivable on an ongoing basis to a commercial finance (or factoring) company at a discount. The factoring company then manages the receivable until it is paid. Factoring is a well-established and accepted method of temporary alternative finance that is especially well-suited for rapidly growing companies and those with customer concentrations.

2. Accounts Receivable (A/R) Financing – A/R financing is an ideal solution for companies that are not yet bankable but have a stable financial condition and a more diverse customer base. Here, the business provides details on all accounts receivable and pledges those assets as collateral. The proceeds of those receivables are sent to a lockbox while the finance company calculates a borrowing base to determine the amount the company can borrow. When the borrower needs money, it makes an advance request and the finance company advances money using a percentage of the accounts receivable.

3. Asset-Based Lending (ABL) – This is a credit facility secured by all of a company’s assets, which may include A/R, equipment and inventory. Unlike with factoring, the business continues to manage and collect its own receivables and submits collateral reports on an ongoing basis to the finance company, which will review and periodically audit the reports.

In addition to providing working capital and enabling owners to maintain business control, alternative financing may provide other benefits as well:

It’s easy to determine the exact cost of financing and obtain an increase.
Professional collateral management can be included depending on the facility type and the lender.
Real-time, online interactive reporting is often available.
It may provide the business with access to more capital.
It’s flexible – financing ebbs and flows with the business’ needs.
It’s important to note that there are some circumstances in which equity is a viable and attractive financing solution. This is especially true in cases of business expansion and acquisition and new product launches – these are capital needs that are not generally well suited to debt financing. However, equity is not usually the appropriate financing solution to solve a working capital problem or help plug a cash-flow gap.

A Precious Commodity

Remember that business equity is a precious commodity that should only be considered under the right circumstances and at the right time. When equity financing is sought, ideally this should be done at a time when the company has good growth prospects and a significant cash need for this growth. Ideally, majority ownership (and thus, absolute control) should remain with the company founder(s).

Alternative financing solutions like factoring, A/R financing and ABL can provide the working capital boost many cash-strapped businesses that don’t qualify for bank financing need – without diluting ownership and possibly giving up business control at an inopportune time for the owner. If and when these companies become bankable later, it’s often an easy transition to a traditional bank line of credit. Your banker may be able to refer you to a commercial finance company that can offer the right type of alternative financing solution for your particular situation.

Taking the time to understand all the different financing options available to your business, and the pros and cons of each, is the best way to make sure you choose the best option for your business. The use of alternative financing can help your company grow without diluting your ownership. After all, it’s your business – shouldn’t you keep as much of it as possible?

Health and Nutrition

What are nutrients?Every molecule in the body is created by Nutrients & there are more than 45 nutrients. These nutrients build molecules, cells, and tissues of the body.We get energy from Carbohydrates, proteins, and fats that we eat.These are called macronutrients. These macro nutrients are broken down / metabolized to give energy to the body.Vitamins and minerals (called micronutrients) are not themselves metabolized for energy, but they are important in helping the macronutrients convert to energy.What is a healthy diet?The optimal diet has to be individualized to meet your unique needs. The United States Department of Agriculture (USDA) food pyramid suggests that we use fat “sparingly,” and that our daily diet include 2 – 3 servings of dairy products; 2 – 3 servings of meat, poultry, fish, eggs, beans, or nuts; 3 – 5 servings of vegetables; 2 – 4 servings of fruit; and 6 – 11 servings of bread, cereal, rice, or pasta.These are general guidelines. Healthy diet is dependent upon many factors like: age, gender, body size, pregnancy, and status of health. A clinical nutritionist or nutritionally oriented doctor can help you determine what type of diet is best for you.While you know it is important to eat a healthy diet, it isn’t always easy to sort through all of the information available about nutrition and food choices.Nutrition has a vital importance to human well-being. Nutrition should play a leading role to improve our quality of life. Nutrition is a key for reducing your body fat percentage.Better nutrition means stronger immune systems, less illness and better health. Better nutrition is a prime entry point to ending poverty and a milestone to achieving better quality of life. Safe food and good nutrition are important to all.Basic nutrition knowledge is constantly taking shape every day, producing new diet trends to an ever growing audience of people who want to know the latest and greatest ways to achieve their physical fitness goals.Get nutrition facts and discover how you can use dietary recommendations to improve your health. As you grow older, getting a nutritionally rich diet becomes even more important. The link between nutrition and health is necessary to achieve optimal health.Good nutrition is a clear path to optimize our quality of life. An important starting point for achieving optimum health is to achieve optimum nutrition and get the proper nutrients from the food.Diet and nutrition are the principle preventive measures against diseases.Reading labels and eating a diet rich in vitamins and nutrients is optimal for healthy nutrition. Research confirms that good nutrition in the early years of life is crucial for human growth and mental development.The study of human nutrition dates back to the 18th century, when the French chemist Lavoisier discovered that there was a relationship between our metabolism of food and the process of breathing.The field of clinical nutrition has evolved into a practice that is increasingly incorporated into mainstream medical treatment. The term “nutritional supplement” refers to vitamins, minerals, and other food components that are used to support good health and treat illness.A clinical nutritionist or nutritionally oriented doctor can help you determine what type of diet is best for you.During the initial part of the visit, the clinical nutritionist will ask you questions about your medical history, family history, and personal lifestyle.In hospitals, nutrition is used to improve the overall health of patients with a wide range of conditions. Effects of exercise and nutrition on postural balance and risk of falling in elderly people with decreased bone mineral density: randomized controlled trial pilot study.Healthy LifestyleHealthy people are stronger, are more productive and more able to create opportunities to gradually break the cycles of both poverty and hunger in a sustainable way.Healthy eating is associated with reduced risk for many diseases, including the three leading causes of death: heart disease, cancer, and stroke. Healthy eating is fundamental to good health and is a key element in healthy human development, from the prenatal and early childhood years to later life stages.Healthy eating is equally important in reducing the risk of many chronic diseases. We spend a lot of money on food, but there are ways to cut costs and still serve healthy delicious meals.When you choose healthy foods instead of sugary or high-fat foods you can actually improve your health by adding extra phytochemicals and fiber. Breakfast foods should be healthy but they have a tendency to be high in fats and sugar.We always hear that breakfast is the most important meal of the day, so why ruin a healthy breakfast.Good nutrition is vital to good health, disease prevention, and essential for healthy growth and development of children and adolescents. Fiber is an important part of a healthy diet.Many of us work very hard to eat healthy meals, but struggle with the urge for candy, cookies, cakes, ice cream and anything else full of sugar and sweetness. Most experts agree that snacking is a part of a balanced and healthy diet, as long as the snacks don’t pile on empty calories.When your best efforts go awry, and you order pizza or serve another meal that doesn’t exactly fit into a healthy diet, you still have many options for making it healthier. Just about everyone knows that fruits and vegetables are a very important part of a healthy diet.Having a well-stocked pantry and refrigerator can be a busy cook’s best weapon in the war against resorting to fast-food, high-fat, unhealthy meals. Fresh oil is a source of essential fatty acids, which help keep the skin healthy and the hair shiny.We believe eating sensibly, combined with appropriate exercise, is the best solution for a healthy lifestyle.FoodsWhen you choose healthy foods instead of sugary or high-fat foods you can actually improve your health by adding extra phytochemicals and fiber. The goal is to balance negative foods with positive foods so that the combined rating for all foods eaten in a single day is positive.If you want to restrict your caloric intake without feeling hungry, find foods highest in any vitamin or mineral or lowest in carbs, saturated fats, or sugars. Our general state of health is partially driven by the types of foods we consume.To make vegetable oils suitable for deep frying, the oils are hydrogenated, so trans fats are commonly found in deep-fried foods such as French fries and doughnuts. Trans fats, beyond a limit, are not good for our health.Hydrogenation solidifies liquid oils and increases the shelf life and the flavor stability of oils and foods that contain them. Other sources of trans fats are vegetable shortenings, some margarines, crackers, cookies, snack foods, and other foods.Since trans fats increase a products shelf life, many pre-prepared foods and mixes (for example, some pancake mixes and pizza dough) contain trans fats.The solution: Whenever possible, eat whole, fresh, and unprocessed foods. When buying packaged foods, put in at least as much time into reading labels and selecting products as you do when choosing a shower gel or shampoo.A good diet is central to overall good health, but which are the best foods to include in your meals, and which ones are best avoided.Fast food has become much more popular of late and all over the world the outcry regarding harms of fast foods is on increase.Be aware that there is little scientific information about the effect of so-called functional foods –foods to which vitamins, minerals, herbs, or other dietary substances are added — despite their growing popularity in the market place and claims of beneficial effects.Some common foods, including nuts, wheat gluten, dairy products, fish, shrimp, soy, bananas and eggs may trigger allergic reactions.FatFats add taste to meals and give one a feeling of fullness when eaten. When you choose healthy foods instead of sugary or high-fat foods you can actually improve your health by adding extra phytochemicals and fiber.Breakfast foods should be healthy but they have a tendency to be high in fats and sugar. The human brain is almost entirely composed of unsaturated fatty acids.You deprive yourself of more than fats when you go for the fat-free or low-fat salad dressing. We need fats to absorb all the beneficial elements of salads and other fruits and vegetables. Learn which are the right types of fats, to create beautiful, supple skin, and a healthy body.Eating more whole foods is a good way to replace many of the processed snacks and foods that have a lot of extra sugar, fat (including trans fat), salt, and other things added to them and a lot of good things taken out, like fiber.In addition to food labeled fat-free and low fat, healthy low fat foods include most fruits and vegetables.Carbohydrates, proteins, and fats (called macronutrients) are broken down (metabolized) to give the body energy.For example, lowering fat and cholesterol intake and adding whole grains to the diet can prevent atherosclerosis (plaque buildup in the arteries), which can lead to heart disease or stroke.Fish is high in omega-3 fatty acids, which are essential components of cells and can protect the heart from, for example, fatal arrhythmias (abnormal heart rhythm). Omega-3 fatty acids found in cold water fish (such as herring, tuna, and salmon) have been reported to reduce inflammation and help prevent certain chronic diseases, such as heart disease, cancer, and arthritis.Safe food and good nutrition are important to all. Basic nutrition knowledge is constantly taking shape every day, producing new diet trends to an ever growing audience of people who want to know the latest and greatest ways to achieve their physical fitness goals.Did you know that you can drastically decrease your chance of heart disease and cancer by eating a healthy diet and following the recommended nutrition guidelines?Proper nutrition is a powerful good: people who are well nourished are more likely to be healthy, productive and able to learn.Good nutrition benefits families, their communities and the world as a whole. Malnutrition is, by the same logic, devastating.

Common Skin Care Mistakes

No-one wants to have dull and lifeless skin, which is why some of us spend all kinds of money on skin care products meant to keep our skin soft and youthful. Although many of these skin care products do actually do what they’re supposed to, the reason many people are unhappy with the results they receive from their skin care product is because the unknowingly fall into many of the common misconceptions of skin care.The best way to take care of your skin is to understand what you skin needs, what it doesn’t need. Take a look at some of these more common misconceptions about skin care, see if you need to tweak your skin care routine.1. Too Much ProductMore is better right? Actually, no it isn’t. Using too much of any kind of skin product isn’t good for the skin. Using too much of an acne treatment, for instance can lead to more severe breakouts, and too much of an eye gel can irritate and burn eyes. Most skin care products absorb directly into the skin, spreading to the affected area, so you really only need a little bit. Body lotions are a little different in the sense that they’re going over the whole body, but you still don’t need a lot, just enough the cover the areas you want without leaving excess on the skin.2. Not Wearing Sun BlockThe sun’s harmful UV rays are the number one cause of wrinkles and sun spots as well as skin cancer. Forgetting to wear a sun screen with an SPF of 40 or higher protects you from sunburn, sun poisoning, wrinkles, and other complications the sun can cause. Remember to re-apply your sun block every one to two hours even if it’s waterproof, as the SPF starts to break down as soon as it touches moisture leaving you unprotected. A good pair of sunglasses is also good to have when out in the sun for a long period of time so to protect the fragile eyes from harsh rays.3. Using The First Product You SeeOne of the biggest mistakes that one can do when it comes to taking care of their skin, is just picking up the first product you see without checking its ingredients. I cannot stress enough how important it is to fully read a skin care products ingredients to see if there is any harsh chemicals. Things like Potassium Hydroxide, SLS/SLES and Parabens are considered to be some of the most common and most harmful chemicals in the skin care world. These substances are known to cause irritation to the skin, burning, inflammation and in some cases they have been linked to cancer.4. Not Being ConsistentIf you apply a wrinkle cream or a moisturizer every couple days, then don’t expect to be blown away with the results. In order for any skin care product to be effective, you must stay on top of its use. If the product says “USE EVERY MORNING AND NIGHT” do exactly that. If you want results from your product, figure out a way to work it into your daily routine of things. A basic skin care regimen should only take about five to seven minutes out of your schedule. A good method for apply any skin care product is right after a shower, as the pores are open and can more easily absorb a product, making it more effective.5. H2OWater is the one constant need other than food that all life on this planet needs. We need water to properly regulate our metabolism, give us energy and to flush the body of wastes. Drinking plenty of water everyday helps to flush out toxins, dirt, and bacteria from the skin that would otherwise cause the skin to look dull and weathered. Start drinking more water and I promise you’ll see a noticeable change in the coming weeks.So, now that you can properly identify some of the things your skin needs and doesn’t need, you should be able to effectively tweak are start your skin care routine for the healthiest and youngest looking skin around. The best things come from nature, so try and stick with all natural skin care products trust me your skin will thank you. Shield yourself from the sun as best as you can, and be as consistent as possible with your regimen. Lastly don’t forget to keep water with you at all times and drink, drink, drink, it can’t hurt. Remember these tips and you’ll be on your way to the best looking skin around.