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Maybe I’m misunderstanding but what you’re describing sounds a lot like a “credit line” to address cash flow issues. But what Fred is describing is financing t
by alberth 4y ago
Maybe I’m misunderstanding but what you’re describing sounds a lot like a “credit line” to address cash flow issues.
But what Fred is describing is financing to bridge to either a liquidation event or another around of funding.
- Animats 4y agoThat's similar to factoring, where you're borrowing against your inventory. Common in apparel.
- 1123581321 4y agoBridge loans are able to be underwritten at better speed/size/rates than credit lines, all else equal. That’s not taking away from your main point about the article.
- icelancer 4y agoYeah, this is the main thing for sure. Not rates in my experience, but speed, yes.
- icelancer 4y agoWe have a credit line now, but often times if you're a new-ish business, banks aren't too keen on giving you one (especially if you are cashflow negative). So sometimes you have to go to places like Kabbage or other pseudo-payroll lender type places who charge insane APRs for short-term bridge financing. Functions pretty similarly, except one is a reputable business (banks... well, kinda reputable) and the bridge loan shops tend to be pretty maligned (and often reasonably so).