Professional and technology services
A services business has payroll, receivables and very little else on the balance sheet. That narrows the instrument set and puts the weight on the quality of the receivable book.
How the balance sheet reads.
With no equipment to charge, the facility is sized against receivables and cash flow, which caps it well below an asset heavy peer at the same revenue.
Recurring contract revenue is financeable with the right lender, and invisible to the wrong one.
Owner compensation policy changes reported earnings materially. Normalise it and explain it.
What usually does the work here.
WHERE IT GETS DIFFICULT
- The $500,000 path is built on collateral, and a services business usually has none to pledge. Expect a smaller number than a manufacturer at the same revenue, and expect to hear that at the first call rather than the sixth week.
- Time and materials billing with long collection cycles is the constraint, not the revenue.
- Working capital and lines of credit$50,000 to $2,000,000 Revolving credit sized against deposits, receivables and inventory, for the gap between paying suppliers and getting paid.
- Advisory and deal preparationEngaged as part of a financing mandate The work that happens before a lender sees anything: the request, the evidence, the repayment logic and the lender list.
- Term loans$100,000 to $5,000,000 and above A fixed sum advanced at closing and repaid over a set schedule, for growth, refinancing or a single large investment.
A professional and technology services file, read properly.
Tell us the amount and the purpose, and we will say what is realistic in this sector.
No lender hears your name until you say so.
A request emailed to twenty lenders leaves twenty records. The next one to see it reads the declines before they read the deal, and a file that looks shopped is priced as one. So the list is built with you, approved by you in writing, and nothing leaves this office before that.
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- 416-841-8468
- Hours
- Weekdays, Toronto time