Is it possible to sell to a bank the future cash flows of a startup?

Asked by jaynorth (37

) February 12th, 2014

Say the start-up has a 10 year contract with a client that entitles me to bill each year $100,000 for a given service. Can I sell all these cash flows to a bank for $1,000,000 (10 years a $100,000 ), less any bank provisions?

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You can get a loan on purchase orders as long it is a well established vendor. If a bank won’t do it, there are Investment Capitalists that might help out. They won’t ‘buy’ it, they will loan you based on a percentage of it, I believe. ‘Factoring’ is generally when you sell your bad debts to a collector.

It depends on what you are trying to build for your business. Not sure why you would be willing to give away up to 20% of your gross profit.

cazzie (24516

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