How to finance 'the big one'


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  • | 9:35 p.m. June 24, 2013
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I recently met with a client who owned a company that distributes computer parts. He just learned that he won a contract with a major customer. That contract would increase his annual revenues by $2 million. He was very excited since he had been trying for almost a year to win this business away from a competitor. He contacted his supplier only to find out it couldn't extend him any credit terms, he would need to pay upfront. His excitement turned to dismay because this major customer's requirements were to pay within 30 days after delivery of the computer parts. How was he going to be able to find the money to pay his supplier? That is when I received the frantic telephone call. He had been to several banks and was declined for a line of credit since his business was only a year old and not yet showing a profit.

 

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