fcsnknd.info

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?

IntroductionProgramming is a very useful and rewarding hobby. There are few better feelings than when someone sees you using a program you lashed together to make your life easier and says that it looks really useful. Most people have, at some point in their lives, really wanted to be able to do something on their computer or phone and been unable to. If you know a programming language, then there is often a fair chance that you can write a program to accomplish that task yourself. While there are a huge number of programming languages, many of them have a lot of similarities; this means that once you learn one language quite well, in most cases you will be able to pick up a new one far quicker.LimitsOne thing that all new programmers must come to term with is the amount of time learning a programming language takes. Although when you have become an expert you will be able to write many programs quickly, you must remember that many programs have taken whole teams of expert developers years to create. So it is important to understand that knowing a programming language or even several is not enough to write some of the more complex programs you have seen. Don’t look upon this new hobby as a way to save yourself a lot of money, as writing your own version of most of the programs that you need to pay for now will be out of your reach.The most important thing that a new programmer needs to know is that the “Learn Programming in 24 hours” sort of books are simply not true. A more accurate title would be “Learn Programming in 10,000 hours”. If you put 24 hours or a week into learning a language you will not be creating the next Windows or a new, state of the art game. It is possible to learn to write a program in 10 minutes, and really all you need to learn a new language is your favourite search engine, but you will not be an expert. The only way to become an expert is much like learning the violin; the answer is practice, practice and practice some more.Selecting Your First LanguageNow that we have examined the limitations and handled some of the more unrealistic expectations, those of you still wanting to learn to code will be happy to know that programming is not a hard thing to start learning and will not require you to pay out huge sums of money. If you are reading this article on-line, you already have the resources to start with some languages, so let us consider what your first language ought to be.Traditionally the first language a programming newcomer learns is either Visual Basic or Python. The first thing to understand is that these two languages are very different. The simplest difference is one of price. Python is totally free; you can start writing python now with just a text editor on your computer, though if you are on Windows, you will probably need to install it first. However Visual Basic, often abbreviated to VB, is both free and not free. On the upside, VB can be simpler for newcomers to learn because it allows you to build the interfaces (the part of the program the user will see) by dragging and dropping the different parts much like designing it in some basic art application. The version of VB newcomers learn is usually Visual Basic 6, but this is rather outdated and has been discontinued. So these days the version learned is often VB.NET which can be considerably less simple for newcomers.VB.NET must be developed inside what we call an IDE (Integrated Development Environment); this is basically a special program you use to write other programs. They also exist for Python, but their use is totally optional. The free VB.NET IDE is called Visual Studio Express. At the time of writing, the latest version is Visual Studio Express 2010. Unfortunately, by using the free version of the IDE you are restricted with what you can do, and any programs you create cannot be commercially sold on. Regretfully, the full paid version of the IDE is not cheap, and probably not appropriate for a hobbyist, but fortunately to learn VB the free version is enough. In practice, very few commercial programs are developed in VB these days, but the Visual Studio IDE allows you to use many other languages. The familiarity you will develop by using it will also allow you to use the power of the IDE for development in many other languages. Some will argue that almost every language can be developed in a text editor and that they are by far the most flexible way in which to code. While this is technically true (and I do suggest trying development in a text editor to compare once you get a little better), I would strongly advise learning your first language with a proper IDE.While traditionally, people learn Python or VB first and these are generally what is taught at schools, I would not suggest either of these. I am of the opinion that your first language should continue to be useful to you one it has served the purpose of helping you learn the fundamentals of programming. If I had to recommend one of these for newcomers, it would be VB.NET as often the most complex part of programming is the graphical side of things and in VB.NET this is very simple due to the drag and drop interface. These two languages are often used as introductions as they are very tolerant of mistakes, and allow you to become confident in programming principles without worrying about a lot of the more complex matters.For those brave souls among you, I would actually suggest Java as your first language, even though it can be complex, and is therefore not a common choice for a first language. Java programs are different to most others in that they do not run on your computer. The user downloads Java, then your code runs on what is called a VM (Virtual Machine). This means that your code runs in a special place Java sets up for it – a fake copy of your computer – and handles the translation of this to the real machine for you. This means that Java programs are “cross-platform”, meaning that they will for the most part run on Windows, Mac, Linux and most other operating systems.Java is a good language to learn, as it is very widespread and useful. Furthermore, it is very powerful, and is available for free for both hobbyists and commercial uses. However, in contrast to VB and Python, it does not tolerate mistakes and requires you to be very specific about everything. It is also an object-oriented programming language, which is a very complex issue which I will briefly try to summarise. Languages like Python and VB are what is known as procedural languages, meaning that the lines of code are run one after another, whereas Java is an object-oriented language. object-oriented development is a term thrown around a lot these days in the programming world, and while not always appropriate it is generally considered a good idea. At the most basic level, an object-oriented program is all about objects. An object is an “instantiation” of a “class”. A class is a blueprint used to describe something like a cat. The class contains both the data about the cat such as its name, age and owner as well as “methods” which are essentially actions the cat can perform, such as miaow. An instance of the class “cat” would give you a particular cat. However, this is not a Java tutorial, so if you are brave enough to experiment with Java you will come across this yourself in more detail. It is worth noting that VB.NET and Python both have support for object-oriented development, and Java has the potential to be used procedurally, but these are not the languages’ primary intended uses and are not often used. If you did not understand that comparison, don’t worry about it too much. Object orientation is hard to get your head around, but any basic Java or other object-oriented language tutorial will have you understanding everything in that paragraph.A final reason Java is a good first language is that it is similar in many ways to Javascript, which is an entirely different class of language. Javascript is a scripting language (as is Python), and learning Java will mean you understand Javascript reasonably well. The difference is between scripting languages and normal programming languages is outside the scope of this article, but as a large generalisation scripts are generally used for automated tasks while programs are used interactively by users. This is not totally true, as both types of language are used for both tasks and most web programs are built in Javascript.As for the actual language you pick, it is entirely up to you. Some may choose the traditional beginner languages or be brave and experiment with Java. Some of you may already have your eye on a language or fancy one of the more specialist languages like Scheme or Prolog. Whatever your choice, the way you will learn how to program is the same.IDEs, Yes or No?Many of the purists say that IDEs are a bad idea, and are packed with unnecessary tools and menus that take up disk space and time to learn. While this is true, I feel that an IDE is definitely worthwhile. Many people offer free IDEs, such as Eclipse and Netbeans, for the more popular languages. There is also Visual Studio, which I mentioned previously; it is very intuitive, very powerful and it supports many languages (much as Netbeans and Eclipse do). If you chose to use Java I would suggest Netbeans, as there is a packaged version of Netbeans with the JDK (Java Development Kit). Most languages need an SDK (Software Development Kit) to work with them, and getting it installed properly and linked to the IDE is often the hardest part of the procedure. Visual Studio already comes with the development kits set up, which makes life easier, but other languages like Java and Python can be quite hard to set up properly. This is why I suggested the Netbeans + JDK bundle for those experimenting with Java, as it handles the complex set up for you, which will save you hours of suffering.There are, in my opinion, three major advantages to using a fully featured IDE. Firstly, they are usually extensible, meaning that there are many free plug-ins that could make your life a lot easier when you get a little more advanced. Secondly, and most importantly, is the ease with which an IDE allows you to debug your code. Most IDEs let you set breakpoints in the code, which will make the program stop when it gets to that point and let you step through it line by line, so you can examine the contents of all the variables at any time. (For those of you who do not know what a variable is, I will briefly explain. A variable is a bit like a train station locker. You ask for one big enough to hold what you want to store, and if what you want to store is the right shape, it can be stored there. When you write a program, any data you want to store temporarily will be held in one of these until you are done with it.) As the old programming saying goes, if you have not found any bugs, you are not looking hard enough. Almost no non-trivial program will work first time, and trying to work out where the problem lies without the use of a debugger is a pain I would not wish on anyone. Finally, an IDE will often give you advice on how to fix issues in the code. This can be very useful for fixing bugs, and saves you having to resort to Google every other minute.Learning the LanguageNow that you have a language and an IDE, it is finally time to learn the language. This, as you may or may not be surprised to learn, is not complex at all – it is simply time consuming. To learn programming for the first time, there is no better way than exploration. Buying a book that walks you through steps will not teach you anything, as you will not understand the reasoning behind what they are doing, and people often get disheartened by the tedium.The key to learning programming is to have a goal. Think of a task, such as a system to keep track of where you are in all the various TV shows you watch, or a system to let you look at all the books you own in a particular category, or, if you feel brave, try to replicate part of something that you use on a regular basis. My advice would be to start small, perhaps by making a sequence of message boxes that insults the user or a really simple calculator. It is important when you first start that your goals are interesting, challenging and entertaining. If you try to make really boring programs you will quickly get disheartened, so try to inject some comedy into your program. The calculator is a very good introductory program, but after you get the general idea it is important to set quite ambitious goals, as if you keep doing simple things you will never learn anything new. It is important to try to incorporate some of the knowledge you have gained from previous work. One of the reasons most books fail to teach programming well is that they use small examples for each thing they introduce, whereas what you really need to do is plan the task without considering what you will need to accomplish it. This means you will be able to code some of it using what you already know, but most importantly, you will not know how to code some of it. The best way to learn is to learn by doing. Go for a full program that does a task you wanted to do on a computer in the past, work on it, and when you are finished you will have learned a lot and you will have a useful (or at least entertaining) program which is far better than some toy program demonstrating lists.I have said that you learn by choosing to do projects where you are unable to do certain sections, thus requiring you to learn, but how do you go about finding out how to do them? It’s simple, and most likely the way you found this article. Go to your favourite search engine (like Google) and search for what you want to do – for example, search “drop down list Java” to find some examples of using drop down lists in Java. Because you will need it for another task, and not just to re-do the same thing the examples did, you will have to play with the examples you find and try to get them to do what you want. Just search each bit you need, and before long you will find that most of the basics are as natural as waking up in the morning, and you did it all without spending a small fortune on books, without getting bored and hopefully while being entertained. To this day, if I am bored, I sometimes break out one of my very first programs which is just a list of boxes and a random number generator. It is your task to try to fill all the boxes such that the numbers the random number generator gives you are in ascending order – if you don’t leave space and can’t fit a number in a hole then you lose and must start again. It’s a simple program, but it took a lot of work when I first made it and I learned a lot from the experience.Once you have a few decent sized programs under your belt, you will find that you know the language well. You will also find that it is rare, no matter how well you know a language, to be able to write a program without resorting to Google at least once just to check something. So with that in mind, it could be argued that you learned the language without ever actually trying to learn it. Clearly there are standards and good practices that you may not pick up on your own, but as you see more examples and read the comments you will find you adopt your own standards rather rapidly.Learning Another LanguageOnce you have learned one language, whatever it may be, the most valuable thing you will have learned is all the key words for searches. When you want to do something in a new language, you need only search what you want to do and the language name. However, by now you will know the names used to refer to what you want to do, allowing your searches to be more effective and yield examples and answers much more quickly. As the fundamentals of programming are mostly the same, regardless of the language you use, you will hopefully be able to guess at the meaning of most of the code much more effectively once you locate an example, allowing you to pick up most of the language very quickly indeed.ConclusionIf you take nothing else away from this article, remember that the best way to learn a skill is practice, practice and practice some more, so don’t expect to become an expert overnight. Remember that programming is not something that can be learned overnight, and that to become a passable expert you probably need to spend at least 10,000 hours programming, so you will need to find ways to remain motivated. Don’t think of it as learning to program – rather, just start programming, and before you know it you will be an expert. Programming is a skill, and while it is quite simple once you have the feel of it, it can be quite daunting to see your little calculator that took you a week and then to consider a modern game like “Batman: Arkham City” and realise how far you have to go.Programming is easy when you know how, but is not a trivial thing to learn, so it is important that you set yourself tasks. These tasks should preferably be interesting and, better yet, entertaining, as these will be what keeps you programming and learning more and more until, one day, you wake up and realise that you know quite a lot. You are your own best tutor and the key is simply to jump in and get started.