Newsletter – August 2009




Welcome ! 

I’m pleased to resume sending you your monthly issues of “Toca Family Business Services Small Business Financing Newsletter“.

I hope you enjoy it! From now on you’ll get new issues approximately once per month. We want to provide you with up-to-date, relevant information to assist you but we don’t want to overwhelm you!
Simple instructions for unsubscribing are located at the bottom of this message.

In the meantime, you can check out my blog, the Small Business Finance Forum .

Best Regards,
Tiffany Wright
Toca Family Business Services 


Supplier or Vendor Financing

Alternative sources of financing, notably supplier or vendor financing that includes stretching out payables but also covers actual loans and mid-term financing provided by suppliers or vendors and how to position the request for such financing.


Traditionally, supplier financing involves stretching out payables from “paid-upon-receipt” or “net 30” days to 60 to 90 days. Some businesses may refrain from sending timely payments to those suppliers or other vendors who don’t call or send frequent reminders or assess interest penalties for nonpayment. (An example of the squeaky wheel gets the grease.) Typically, however, unless agreed upon in advance, suppliers tend to balk when the terms are extended past 30 days. If your supplier is also a small business, your slow payments could cause cash flow problems and thus, financial difficulty for the supplier, especially if you are a major customer of that supplier. If the supplier is relatively large and has good credit, you can often obtain extended payment terms. The best time to have this discussion is in advance of the purchase or shortly after the purchase but long before payment is due when buying on a regular schedule. If you have been unable to obtain a bank loan, other loan, or other financing, supplier financing can help. If suppliers or other vendors comprise the bulk of your payables, then supplier financing may be just what you need to access liquid working capital for your business 

If you have been a good customer or have the likelihood of becoming a larger customer, the supplier may even be willing to provide you with a short or medium term loan secured by the inventory or equipment the supplier provides you. The best way to make this happen is to appeal to the supplier’s business sense and stress the highly positive impact your growth will have on the supplier. i.e., If you are a painting contractor and you purchase a minimum of $10,000 in paint a month, stress how you contribute $120,000 in revenue to the paint store’s annual. State how the only thing holding you back is your ability to fund purchases when your company gets paid ~60 days after work is completed. If you could finance the $10,000 per month purchase, you could potentially grow the business to require paint purchases of $12,000 – $15,000 per month, an increase of 20-50% from you.

Best Regards,
Tiffany Wright
Toca Family Business Services

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Tiffany Wright
Toca Family Business Services
595 Piedmont Ave. NE
PMB #206
Suite 320
Atlanta, GA 30308
Ph: 404-642-0509
Fax: 404-348-4469 

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Toca Family Communications Group, LLC, 245 N. Highland Ave. NE, Suite 230-230, Atlanta, GA 30307, USA
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