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Welcome to Hamilton Quarterly!
Business Finance Made Simple! ®
is a motto that
we’re proud to carry, and one we can truly stand
behind. Read the ways in which Hamilton can and
does make financing simple, in the article entitled,
Flexible Financing.
We welcome and appreciate your interest in
Hamilton, and we hope you enjoy this summer edition
of Hamilton Quarterly.
Regards,
The Hamilton Group
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Flexible Financing |
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HamiltonFlex
offers businesses the most control over their
financing needs. With
HamiltonFlex,
there are no complex terms or arrangements.
Simply put, you get capital when
and how often you need quickly and
dependably.
HamiltonFlex Features:
No personal
guaranty
While personal guaranties are normally required for all
traditional forms of financing and in other factoring
programs, with HamiltonFlex there is no requirement
for corporate principals or owners to sign a personal
guaranty. Thus, unlike other finance programs, our clients' corporate principals and owners
are not held personally liable in the event of credit
default or corporate bankruptcy.
No volume requirements
No other financing option
allows for greater financial control. By allowing business owners to
choose which invoices to factor, HamiltonFlex effectively gives
the owner direct management of their financing needs. Additionally,
there are no monthly minimum requirements that bind businesses to factor
a certain dollar amount each month. This great flexibility is an ideal
solution for business whose seasonal or otherwise variable sales require
intermittent financing, for businesses whose cash flow needs demand
maneuverability, and for business who prefer direct control over
financing costs.
No blanket liens
With HamiltonFlex, as with all of Hamilton’s
factoring programs, there is no obligation for businesses to expose
corporate assets under a blanket lien. Hamilton requires a first lien solely
on accounts receivable and general intangibles, and no other assets.
Not only does this reduce risk for Hamilton’s clients, it allows for
more flexibility in the event a business has outstanding debts with
other financiers.
Hamilton has a wealth of experience in negotiating workout and
transition strategies for businesses with pre-existing arrangements with
other lending institutions, as well as the IRS. Because of Hamilton’s
minimal lien requirements, such strategies are more readily achievable.
No escrow accounts
With no escrow account requirement, HamiltonFlex
allows businesses to reap the full benefit of factoring. This
additional feature maximizes the amount of cash available to account
holders by not requiring that money be tied up in a trust account.
No term agreements
Because there is no term agreement to sign, use
HamiltonFlex for as long as needed, even if only for a few
months.
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Hamilton’s Most Recent Success Story |
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Problem
A South Florida staffing firm specializing in temporary
placement of building and construction personnel saw
a major upswing in business in the months following
Hurricane Wilma.
Never believing that too much business could be a
bad thing, the owners soon found themselves
struggling to keep up with demand. They needed
capital to support new personnel, and they needed it
fast.
Solution
Within a week, Hamilton was able to visit with the
firm, evaluate their financial situation, and structure
a factoring program that met their growing needs.
With Hamilton’s quick capital solution, the firm was
able to secure the resources it needed to meet the
nearly tripled volume.
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Factoring versus Asset Based Lending |
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One of the
main differences between factoring and asset-
based lending is the issuance of debt.
Asset-based lending is a collateralized loan obligation
secured by accounts receivable and/or other assets.
Because of its status as debt, asset-based lending
appears as a liability on the balance sheet, and negatively impacts financial
ratios and ultimately net worth. Alternatively, factoring is the
purchase of accounts
receivable rather than the securitization of a loan.
Factoring is thus termed off-balance sheet
financing. The advantages of off-balance sheet
factoring over asset-based financing and other forms
of debt financing are:
- Availability of cash flow is effectively limitless as
it is dependent on the growth of accounts receivable, rather than selected
financial ratios.
- Greater ability to
manage balance sheet and other
financial statements.
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Take The Test |
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Test your knowledge of
the history of U.S. currency?
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| Questions of the Quarter |
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Why is an escrow
account required for some factoring arrangements?
Factors typically require an escrow
account as added security to ensure payment on
factored invoices. The amount required to be
maintained in escrow my either be a static dollar
amount or a percentage of outstanding, factored
invoices. In most cases, the escrow account is
replenished by withholding funds from advances
and/or remittances. Thus, should any adverse
events arise concerning invoice payback, the factor
can be compensated by debiting the escrow account.
Not all businesses can afford to have cash tied up in
an escrow account. Recognizing this,
HamiltonFlex
program does not require escrows to be maintained
by the account holder. maintained
by the account holder.
Will Hamilton handle the
collections of accounts receivable?
As a provider of factoring services,
Hamilton does not normally involve itself in the actual
collections of accounts receivable. In fact, we
prefer to remain in the background of our clients’
customer relationships. Our goal is to maintain a
seamless process between Hamilton, our clients and
our clients’ customers.
When you submit a Question to Questions of the
Quarter, we will send you a free copy of Hamilton’s
Pocket Guide to Factoring, a comprehensive and
handily sized guide to terms and options.
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With an accommodating structure and
flexible requirements, Hamilton's factoring programs offer
businesses a fresh, smart approach to managing cash
flow.
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