There are a multitude of different types of industries, and amongst these are financing and leasing companies. They too at times are in need of funding although for the general consumer they just assume that the owners of these types of businesses are rolling in money and that’s why they can offer the type of financing services that they do. This is not always the case and when they are in need of funding they can go after what is called securitization.
What happens in this case is these companies gather up some of their assets to sell to investors. Their assets in this case are leases and loans that they have made to their clients. This is why you may see someone else taking over your loan or lease if you have dealt with a company for this need. It doesn’t mean that the original company has gone out of business, it just may mean they are selling off a portion of their assets, and your account may be included in this sell off.
This type of financing for these specialty companies is often seen in the Business Development (BDC) offerings. This company may make a public-private partnership with independent lenders.
The BDC restricts themselves to serving the financial needs of entrepreneurs. Not only do they offer securitization but they offer other forms of financing and consulting services to small to medium sized businesses.
For entrepreneurs it often serves them better to deal with a financial institution like BDC because they have a better understanding of entrepreneurs compared to conventional lending institutions who may have a much stricter mandate.
Finding financing for a business is not an easy task. It doesn’t matter whether it is for a new business or an established one there is a lot of criteria that has to be met. Many documents have to be relied on and the most important of these are the business plan for the new soon to be business, or the financial statements of the existing company. This is where the business accountant can be really instrumental in helping a business obtain their financing.
These documents are what financial institutions rely on as their source for the viability of the business they are considering investing in. When they are produced in a professional manner not only is the information contained easier to access they appear more credible.
Although financing for any business can be difficult to get, it is not impossible, otherwise the lending institutions performing this service would end up going out of business itself.
