Services
Copia Financial a boutique investment bank, dedicated to its client's economic growth and sustainability.
There are many forms of financing in the market place, and Copia Financial will assist you in understanding and identifying your options as well as your needs.
Forms of Financing
CFS will act as a Guide
during your periods of financial turbulence; we will assist you in your restructuring, your reorganizing, the daily monitoring of your cash flows, we will identify the forms of finaning best suited for you, and we will become your bridge to financial growth.
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Forms of Finance
Senior Debt
Senior debt would be the typical loan obtained from a ‘Schedule A’ bank. The security would generally be on all assets of the company.
Loan amount is based on a percentage of your accounts receivables and inventory. A typical rate would be 80% on AR and 50% on Inventory.
This type of financing is the least expensive form of financing found in today’s market place. However it is worth noting that this is the most difficult financing to obtain; as the qualifying factors are too challenging for many businesses to meet.
Subordinated Debt
Sub-debt financing, also referred to as Mezzanine financing is capital that sits midway between senior debt and equity. Sub-debt is more risky than senior debt since it is generally subordinated to senior debt in terms of collateral rights and right to cash flow. As a result sub-debt is more expensive than that of senior debt.
Unlike senior debt, Sub-debt loans are based on cash flow as oppose to assets.
Asset Based Loans (ABL's)
Asset Based Loans are similar to Senior Debt, as the loan amount is based on the value and % allocated to the company's assets. ABLs typically lend a higher percentage on your assets than a ‘Schedule A” bank. However their rates are significantly higher.
In most cases ABLs are short term solutions, and should not exceed more than one year.
The advantage of ABLs is the fact that they have very few, if any, covenants to obey by, and profitability is not the major concern. But the security and the valuation of the assets are.
You can also expect monthly monitoring fees as well as an upfront due diligence fee.
ABLs are far stricter with their reporting requirements and often demand weekly and, at times, daily reports. Copia Financial has a wealth of experience with ABLs, and is familiar with their reporting conditions, as well as their demands.
Factoring
Factoring is the process of selling your invoices or accounts receivable to a factor for immediate cash. The factoring company will advance you a percentage of each eligible invoice that you issue, up to 90%, less any initial fees; they will collect on the invoice and remit the balance to you upon payment by your customer.
Factoring has its advantages; as you will receive the cash as soon the product service has been rendered. The disadvantage is that the cost of factoring is high.
Purchase Order Financing
Purchase Order Financing is an excellent method for a business to take advantage of C.O.D. discounts without affecting its existing Line of Credit. It is a good solution when cash flow reserves are low.
Private Equity
Private Equity scenario usually exists where there is no security, or no cash flow to support interest and debt repayment. Entrepreneurs often seek private equity to conserve cash; are in an early growth stage of their business, or are in a start-up situation.
If you find the right partner, this type of financing will accelerate the growth of your business.
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LATESTS TRANSACTIONS
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National Distributor - $250,000 ABL Facility:
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Copia Financial arranged a $30,000,000 investment in a combination of equity and debt ...
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