Capital Advisory Services

Private equity financing provides capital in exchange for ownership interest in your company. This form of financing carries high levels of risk for the investors and naturally the investors expect high returns (20%-40+% annually) corresponding to those levels of risk.

Equity capital is designed to meet various corporate objectives including rapid growth, employee or shareholder buyouts, acquisitions, etc. There are many entities that offer this form of capital including Venture Capitalists, Angels (private investors who have an interest in helping small businesses) and SBICs (Small Business Investment Corporations that have partnered with the federal government to offer venture capital to small businesses). These investors can receive between 10%-50% of the company's equity in exchange for their investment. This form of financing can take place in multiple phases, commonly referred to as "rounds." Companies that have already raised equity capital are often in a better position to raise follow up rounds as compared to businesses who attempt to raise private capital for the first time.

The process of raising equity capital is time consuming and very frustrating for most entrepreneurs and businesses. Very few (approximately 1%-2%) succeed at raising equity capital for their plans. This is especially true in today's economic climate.

Pillarton's team members have extensive experience in successful closing of millions of dollars in private capital through Venture Capitalists and Angel Investors.

To help your business run smoothly and profitably, many banks and financial institutions offer various commercial loans and leasing programs. The list below is a summarized version of the most popular lending and leasing programs available in today's market:

Commercial Loans

Generally available in both long-term and short-term, these loans are either secured or unsecured. Commercial loans can provide quick access to cash for many types of expenditures including asset purchases, cash flow management, working capital, as well as business expansions and acquisitions.

Commercial Lines of Credit

This is another way to secure cash for a variety of short-term and ongoing business financing needs. Similar to commercial loans, these lines of credit provide working capital for a variety of business projects. However, unlike loans, lines of credit offer flexible access to funds on an as-needed basis and the interest charges only apply to the portion of the funds actually utilized.

Equipment Lending

This can be a cost effective way for your business to acquire business equipment or other capital assets.

Business Leasing

With little or no down payment, business leases lower your barrier to acquiring certain needed assets. With several available leasing options such as lease purchase/finance lease, TRAC leases, and fair market value leases, there is probably a program that can suit your capital needs. Ask your tax advisor about possible tax advantages to leasing.

Factoring Services

This can be an ideal solution for companies that cannot afford to have their cash flow tied up in receivables for more than 30 days. Factoring is a discount financing program available to companies that would rather convert those receivables at a discount in exchange for immediate cash. Another benefit for the seller is that the factor, or buyer, assumes collection responsibilities on receivables factored. More costly than traditional commercial loans or lines of credit, factoring is used typically by businesses that do not have ready access to traditional commercial loans or lines of credit.

SBA

The Small Business Administration (SBA) is a federal agency that provides financial, management and technical assistance to businesses. They offer loan guarantees, training programs, advisory services, financial programs and vast resources to help start or run businesses in the U.S. According to SBA's definition, nearly 99% of all businesses in the U.S. fall under the category of "small business."

Commercial real estate financing generally takes the form of a mortgage used to purchase or refinance a variety of commercial properties such as office buildings, retail or industrial spaces, and apartment complexes. This type of financing is available typically at variable or fixed interest rates and can take the form of senior or subordinated debt.

The lending bank or financial institution considering such loans will often look at the creditworthiness of the business and the property as security on the loan. Small business owners often personally guarantee these debt amounts in order to finalize such loans. Although the payments for a commercial real estate loan can be amortized over 20 or 30 years, the actual loan term or life of the loan is often shorter at 10 or 15 years. At the end of the term, the borrower is expected to make a final balloon payment zeroing out the loan balance. At that point, many rely on refinancing options to pay off the original loan.

This is specialty financing involving both debt and equity. Normally, these lenders have fewer rights over collateral than senior lenders, making subordinated financing riskier, resulting in higher financing costs.

Insurance companies, finance firms, and subordinated debt funds typically provide such financing. The life of a subordinated debt is typically between 5-10 years deferring its principle payments until after senior debts are paid.

Since there is little collateral security in these types of debts, the lender can request anywhere between 1-10% of company's outstanding stock in the form of warrants. These loans are designed to refinance existing debt for businesses as well as finance a turnaround or an employee buyout.