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Alfred Hedaya and Elina Baldgula of Hedaya Capital Explains the Process of Factoring and the Downside of Crowdfunding

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Hedaya Capital was started 10 years ago. The family-owned and operated bank caters to the financial needs of small businesses. The bank also strives to create a higher level of service to new business owners that can be difficult to receive from a bigger institution. Aside from providing financial accommodations, Hedaya Capital connects business owners to others in the same industry. In an effort to assist with growth, Hedaya Capital also refers small businesses to affiliated partners that can offer other services.  Alfred Hedaya serves as President of Hedaya Capital and Elina Baldgula serves as Business Development Officer and In-house Counsel at Haedaya Capital.

Factoring

Factoring (also known as one of the oldest forms of business financing) is the cash-management tool of choice for many companies. Factoring is very common in certain industries, such as the clothing industry, where long receivables are part of the business cycle. This form of business financing is also very good for a new company because it may be harder to provide financial statements showing three years of profitability (and in some cases equity in the company) when attempting to get a cash flow loan from a bank. “For new companies, we may ask for financial statements, but we’re not making our decisions based on those statements. Our primary concern is who the company is selling to and do we believe that the company has the ability to produce, ship and sell the product,” stated Alfred.  “Part of the benefits of factoring is that the receivables are sure, as long as they’re credit approved, clients can ensure that if their customer goes out of business or bankrupt, they will still receive payment.  Factoring is also very flexible, if the client is growing, so is their availability to additional financing,” added Elina.

The Downside of Crowdfunding

Although crowdfunding has proven to be successful for many in the beginning stages, can this actually be a model to use as the business grows?  “We believe that crowdfunding is good for the startup capital, but not for sustaining a company’s growth, “stated Elina and Alfred. “Companies must think about the future, once they start to grow and have to deliver product in large quantities, crowdfunding may not be the best option,” added Alfred.

Interested in ways to seek capital for your company? Call us at Exceed Network and let us guide you in the right direction!

info@exceednetwork.org

718-787-1400

379 Kings Highway

Brooklyn, NY 11223

 

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