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?

Why Do You Need Sports Nutrition

Whether you are exercising to improve your health, a professional athlete or a bodybuilder, the sports nutrition plays a vital role in optimizing beneficial effects of physical activity. Choosing a right nutrition can result in injury prevention, improved performance, and recovery.According to Thomas Edison, “The doctor of future will no longer treat human frame with drugs, rather will prevent and cure disease with nutrition”.In order to support your goals and health, different nutrition professionals offer a number of services. Moreover, these nutrition can range from a daily food diary, to comprehensive nutrition and food plan for competitions and training.Here we will explore the importance of sports nutrition, and how a sports nutritionist can support our training regime. Also, they covered supplements and nutrients that are frequently included in the dietary program of athletes. We will discuss these things in details.The importance of sports nutritionConsuming balanced food and drink is very important for us all. However, people that are actively participating in sport on a routine basis should know that it can also affect their performance. For instance, athletes, may require more calories compared to average people.Those who are athletes, or even people that make up their mind to start exercising on a daily basis, should not let a good nutrition plan fall down on their list of priorities.Sports performance and the energyProtein, carbohydrates, and fats all provide our body with fuel to maintain the energy. Furthermore, carbohydrates are a primary fuel used by our working muscles. The adequate intake is necessary for preventing muscle fatigue. You are advised to monitor the fat intake, but do not completely remove it from the diet.Fats provide fatty acids in our body that can be used an energy source – especially if your exercise sessions last more than an hour. These fats also provide the building blocks for hormones as well as formation of cell walls.Proteins can be used as an energy source and they are critical for building new muscle tissues. People that are taking part in resistance training, their body will require additional protein.Weight managementEating well is very important to maintain a healthy weight. So, if you are trying to lose weight, strictly reducing fat, calorie intake or protein can have a negative impact on your performance. Meanwhile, it can also rigorously harm your body.Some specific and useful foods that you should be a part of the diet for the optimum sports nutrition include:· Whole grains· Vegetables· Fruit· Healthy fats.· Hydration, and· Sources of lean protein as well as low-fat dairy productsStaying hydrated is of utmost importance, especially when you are taking part in any sport. The inadequate fluid intake can lead to dehydration. It also affects the performance, and could be dangerous for health as well.Although dehydration can occur in any activity, it is very prevalent when exercising in humid and hot conditions. The perfect thing for re-hydration is water, but it is advised to use sports drinks with electrolytes, for those who are engaged in the physical activity for longer than an hour.After the eventYou are highly advised to avoid neglecting your nutritional needs, if you have had to walk the last half-mile of your run due to fatigue or even the things have not gone according to your plan in your game. No matter what the result is, it should be your priority.Footballers, casual runners, athletes, and others typically do not consume enough fluids when they take part in different events, or trainings. So, it is very important to restore the balance after every event. The water is perfect for rehydration.How sports nutrition professionals can help?The major aim of a dietitian or sports nutritionist is to create a nutrition plan for the training needs of different clients. The plans will incorporate hydration and food. It does not matter whether you are training for professional events or exercising casually, sports nutrition is very integral to performance.Such a strategy can also help to:· Enhance recovery.· Promote good health· Increase energy levels· Help manage weight· Develop growth and body composition· Improve concentrationIn order to create an effective nutrition strategy, sports nutrition professionals should always assess not just your diet and training, but also day-to-day habits, lifestyle, supplements and whether you are taking any medication. Nutrition professionals should also support as well as be able to analyze you with your short-term and long-term goals.NutrientsCarbohydratesThe 2 key forms of carbohydrates are, 1. Starchy or complex, and 2. Simple sugars.Complex carbohydrates, are also known as the starches, and they include grains such as pasta, rice and bread. Just like simple sugars, some complex carbohydrates are better than others. Processed refined grains like, white flour and white rice are less favorable because the fiber and nutrients are removed.Rather, nutritionists recommend that where possible, people should opt for unrefined grains that are still packed full of minerals, fiber and vitamins.Whereas, the simple sugars can be found in refined products and provide a sweet taste. These are naturally found in fruits, vegetables and milk products.We can also add them to our foods using honey, white or brown sugar, maple syrup and molasses, etc. Although all types of sugars that we eat are used by our body in the same way, but it is highly suggested to get simple sugars from foods that are rich in sugars naturally because such foods also contain important nutrients and fiber.FatsIt is an essential component of every diet because it is a great source of energy as well as helps our body to absorb nutrients.Although fats are very important, but we should still monitor the quantity of intake. Using a lot of fats could result in excess weight gain and in increased risks of severe health concerns.The saturated fats can easily be found in different animal products as well as processed foods like, chips, meat and dairy products. Such fat type is not considered to be healthy for the human heart and is thought to raise bad (LDL) cholesterol levels.Avocados, nuts, oily fish and olives are rich in unsaturated fats. Such fats are considered to be healthy for our heart and can work to raise good (HDL) cholesterol levels as well as lower the LDL cholesterol levels.ProteinEvery cell of our body contains it and due to this reason protein is important for helping to repair and build tissues. Proteins are also used to make hormones, enzymes and a number of additional body chemicals. Furthermore, proteins are very crucial for forming the building blocks of bones, blood, cartilage, skin and muscles.Some of the most common protein foods include fish, meat, eggs, nuts, soya products, seeds and pulses.SupplementsDifferent bodybuilders, sportsmen and athletes use supplements to boost their performance, recovery and strength. Supplements are available in a number of forms ranging from minerals and multivitamins through to creatine, protein and many other ‘ergogenic’ aids.You are advised to ensure that your diet is balanced, healthy and suits your sport, before opting to take any form of supplement. It is also advised to consult a registered nutritionist or an accredited sports dietician before if you have decided to take additional nutrients in supplemental form. These experts can assess your suitability for a particular supplement.Some common sports supplements include the following:CreatineIt is a high-energy compound which helps to provide and store energy. It is produced within our body, and is naturally available in meat and fish. It can also be taken in the form of supplements.In order to increase muscle strength, creatine is used by sportsmen and athletes as a dietary supplement. It is intended to boost performance during frequent, high-intensity exercise and also help you train for longer.Whey proteinA natural protein which is naturally present in milk, and contains very little carbohydrate, lactose or fat. It is considered a naturally complete protein, which means whey is made up of all essential amino acids that are required in our average daily diet.Also housing the perfect combination of amino acids, this protein also contains branch chain of amino acids (BCAAs) that are the 1st ones to be used while intense training. Whey provides our body with these amino acids and in turn they assist with rebuilding and repairing lean muscle tissue.Whey protein is extremely easy to digest so it can provide instant nourishment to our muscles and can absorb quickly.Energy drinksIt is extremely important to stay well hydrated during training and exercise. Even a little amount of dehydration could be detrimental to your performance levels. Although, drinking water is considered a good way to keep ourselves hydrated during exercise. Still, some bodybuilders and athletes opt for energy drinks, especially people that undertake endurance events like long distance running.A number of energy drinks consist of sodium and other electrolytes that encourage drinking and help us to stimulate thirst. They also enhance our body’s ability to hold the water. Furthermore, carbohydrates contained in many energy drinks and can provide us with extra energy which may be needed in the latter stages of training.This article is reviewed by an experienced dietitian, and is provided for general information purposes only. People having trouble with their dietary plans are advised to consult specialists.

How to Know If Home Schooling Is Right For You

Have you considered homeschooling your children? Maybe you have but often wondered what you would be getting yourself into if you did. Thousands of parents home school their children every day. It wasn’t an easy decision, there are a lot of things to consider when you home school your child, here are some of the main things that you need to consider.Financial strainOne parent will have to stay home with child while they are schooling them or working part-time, if you are used to living on a two income family there will be some sacrifices made to compensate for this. Also home schooling, while can be done cheaply can also cost more money depending on which program that you use for homeschooling.Time Teaching your children at home will take up most of the day. You will have to have available time to teach, take on field trips and to prepare lessons. There is a lot when you are doing this at home. During the day you will have very little time of your own.Field tripsAfter a while your child may get bored learning at home, and want to have friends to play with, this is a huge part of schooling is having friends to play and socialize with. You will have to make arrangements to take your child out to the park or the library where they can socialize with other children.Household ChoresIt will be hard to keep up with household chores while you are teaching classes. You will have to work on most of this after school hours to complete everything. You will have to be organized not only with the work which is needed to be done around the house, but with the lesson plans and everything else.Your childDoes your child want to go to public school? Are they comfortable being taught by you and willing to learn if you teach them? You want this to be a pleasant experience for them and need for them to learn, if they don’t want to be taught at home it will be a daily struggle for them to learn and have a pleasant experience.Homeschooling can be a great experience with them, many children will continue on to college and do well in college. It’s a huge decision to teach your children at home and make sure that they learn everything which is needed for when they are adults,. It’s not a decision to take lightly.