Alternative Financing Vs. Venture Capital: Which Option Is Best for Boosting Working Capital?

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?

Can Nutrition Bars Really Be Nutritional?

My patients frequently ask me if using nutrition bars would be of any benefit to their overall health or weight loss plan. I admit, even I grab one of these bars every now and then for a quick snack, or even lunch on a really busy day sometimes. In fact, I would much rather have my patients substitute a good nutrition bar for lunch than grab a high-saturated-fat burger and fries.These bars are convenient, they don’t require refrigeration, and, if you read labels before buying, they really can help you get some good nutrition in a hurry. Here’s what I tell my patients about the pros and cons of the “nutrition on the run” that these bars offer.Are All Nutrition Bars Alike?Seems every time I go to the health food store, there’s a new nutrition bar promising to be better tasting, or more vitamin/protein-packed than all the other bars! However, what tastes good to me may not to you, so, different flavors aside, let me explain what ingredients should be in a good nutrition bar.•Protein:For meal replacement, a good bar should have at least 15 grams of protein, preferably from whey or even casein protein and not soy, gelatin or collagen protein. Many bars, however, contain soy protein isolate, or a blend of whey, casein, and soy. Soy products can interfere with thyroid hormones as well as imbalance male and female hormones, as it adds plant estrogen, or phytoestrogens, to your body.•Fat: Should be fairly low in fat, not more than 3 grams saturated fat and 0 trans fat, 10 grams total fat. Steer clear of bars that contain cholesterol-boosting oils like palm kernel oil. Bars with polyunsaturated vegetable oils like olive, safflower, or coconut oil are best.•Carbohydrate: For meal replacement, there should be a balanced fat/carbohydrate/protein ratio, in a 40/30/30 distribution, i.e., 30% protein, 30% fat, 40% carbohydrate. If you want added protein only, then the carb and fat level can be lower than this distribution. Some bars can contain a whopping amount of sugar, however! Limit sugar to 10-15 grams.•Sugar Alcohols: Many low carb nutrition bars contain sugar alcohols. These help sweeten the bar without adding carbohydrates. When figuring the carbohydrate, or glycemic load, they should be subtracted from the overall carbohydrate content. For example, if the bar contains 25 grams of carbohydrate and also 20 grams of sugar alcohols, then the effective carbohydrate count would only be 5. Some people get digestive upsets from sugar alcohols which can be a drawback to bars that contain it.•Vitamins: A good bar has at least 1/3 of the minimum daily requirements for vitamins, usually in the 30% range for crucial vitamins like C, E, D, A. This is especially important if you are using a nutrition bar as a meal replacement.•Minerals: Many good bars also contain 1/3 the minimum daily requirement of necessary minerals like potassium, magnesium, calcium, zinc. Again, should be in the 30% range for meal replacement use.•Fiber: Many nutrition bars contain very little fiber, but several brands have between 4-6 grams. Or, at least have a piece of fruit, or a salad, with it to make up for fiber deficiencies.•Calories: If you’re using it as a meal replacement for a quick lunch, your nutrition bar should have between 200-300 calories in it. Otherwise you’ll be at the snack machine in an hour!Are There Any Cons to Nutrition Bars?We’ve talked about what I recommend a good bar should contain. Now, are there any real disadvantages, or cons, to using nutrition bars? As I tell my patients, I think that answer depends on how you use them. With that in mind, here are some possible disadvantages to using nutrition bars that you might consider when deciding to use them everyday or just occasionally:•Cost: Most good nutrition bars can cost anywhere from $2 to $3 a piece. This can get expensive if you use them everyday. However, if you use them as a meal replacement for one meal a day, that’s still less than the cheapest burger place for lunch, a lot less fat and salt, controlled calorie amount, and more vitamins and minerals.•Excessive Nutrition: If you’re using a nutrition bar for just a snack here and there, and not as meal replacement, look for one that has less than the 30% minimum daily requirement of vitamins and minerals to avoid over-intake of nutrients. This is especially true if you are taking a good vitamin/mineral supplement already everyday and eating well at your other meals. Too much Vitamin A can pose liver problems. Too much Vitamin E can result in excessive bleeding should you cut yourself.•May Contain Herbals: Steer clear of nutrition bars that contain “energy boosting” herbs such as ephedra, bitter orange, or even caffeine from green or black tea extracts which can affect some people’s heart rate or blood pressure adversely.•Taste: The taste of these bars can vary widely from brand to brand and price range. Some are in the “acquired” taste category and can be rather dry. Then there are others that really taste great. You really have to shop around and try a lot of different ones to find one you like and could eat on a regular basis.If you take medications, it’s always a good idea to ask your doctor about adding anything with vitamins/minerals in it that may interfere with absorption of your medications. Nutrition bars should not take the place of a balanced diet of whole foods, but they can provide a satisfying solution to a chocolaty-sweets craving, or provide a quick and nutritional meal on the run!

All About Pharmacy Technician Schools

In many countries today, healthcare industry employment continues even while other industries falter, making a health service job a good choice for anyone considering a new career.Pharmacy technician jobs are one of the main positions seeing drastic increases with hiring expected to increase as much as 25 percent over the next few years. This is a great opportunity for anyone with good attention to detail to consider a career as a Pharmacy Technician or `PT`, especially since it is possible to complete certification programs at reputable pharmacy technician schools in as little as two years and get into a well-paying job soon afterward.Different Types of Pharmacy Technician SchoolsIn the US and Canada, some PT jobs do not require any certification or schooling although most do. Those who have schooling and certification are definitely preferable for positions, however, making schooling something that anyone looking at a career as a PT should consider very seriously.In all likelihood, more jobs will move toward requiring certification as well, so skipping the education may reduce job hire and advancement opportunity.Pharmacy Technician education is available in programs that last anywhere from 6 months to two years or more, depending on the depth of training.Like many other medical training and technical programs, the shorter programs give a basic, fundamental overview of what to expect on the job and general education relating to basic pharmacology, pharmacology law, pharmacology records, inventory, labeling, ordering and many other relevant topics to working in a retail pharmacy environment.Courses and diploma programsStudents that attend the shorter programs usually earn a Pharmacy Technician Certificate for completion of the program, but have no actual approved certifications.Longer courses offered by schools include specialized diploma programs and Associates Degree courses that last between about 12 months to 24 months.Diploma programs are great for students who already have some healthcare service experience and want to move into a position as a PT, as well as those entering the field new.Study usually includes all that is mentioned above, plus pharmacology in more detail, dosage calculation, mixing medications and others, and usually includes an externship to prepare students to take the certification exam. Students completing a diploma course and passing their certification exam will earn the title of Certified Pharmacy Technician or CPhT.Associates in Health Sciences with a PT specialty takes two years and is recommended for any individual if there is an interest in both obtaining a college degree, and being able to advance the fastest in their career.Courses of study are much more in depth and include additional medical subjects. Externships are a required part of the curriculum, as is passing the certification examination. Those with their CPhT and an AS degree stand the best chance of being hired in non-retail pharmacy technician positions, and starting at the highest salaries.Accredited vocational programIn the UK and many other countries a pharmacy technician is required to complete both an accredited vocational program in pharmacy services and a pharmaceutical science program, and must be registered with numerous UK healthcare organizations.Courses of study include that which is mentioned above, as well as medicines management for patients and training in running and assisting in hospital clinics and more.Please note however, in the UK there is a difference between a pharmacy technician and a pharmacy dispenser, with the former having more vocational and educational requirements.Interested individuals are advised to contact local professional organizations in order to get additional details about attending school to become a PT such as which are the best courses and whether they offer job placement and financial aid.In the US, contact the American Association of Pharmacy Technicians (AAPA) or the Pharmacy Technician Certification Board (PTCB), in the UK contact the General Pharmaceutical Council (GPC) and in Canada the Canadian Association of Pharmacy Technicians (CAPT) to name a few.Employment After Attending PT SchoolsThere are actually many more employment opportunities for PTs than most people assume. While the majority of jobs are in retail pharmacy positions there are much more specialized career options for pharmacy techs with the right training.Hospitals, medication manufacturing and packing companies, medication compounding pharmacies, nursing homes, psychiatric facilities and any type of medical facility that either fills medication prescriptions or dispenses medications directly to patients make use of pharmacy technicians.These positions can be very rewarding, and tend to pay more as well. Certain qualified technicians also have the ability to counsel consumers and patients on the use of their medications, as well as answer medication questions.In any case, attending schools that offer the most detailed training and externships, and prepare students to become Certified Pharmacy Technicians are highly recommended for anyone interested in a career in healthcare services that pays well and offers plenty of room for advancement.