Home | Business News | Browse by Publication | M | Metal Center News

Cash to expand may be at hand.

Article Excerpt
OBTAINING FUNDS TO EXPAND does not have to be a difficult and frustrating experience for metal center operators. In fact, acquiring money for business expansion should be far easier than obtaining start-up or operating financing. The secret lies in using the service center operation's track record of profits and growth, its credit history, cash flow and financial statements as tools when seeking expansion funding. Of course, looking in the right place also helps.

Bond sales method

A bond represents a method of long-term borrowing utilized by incorporated metals distribution businesses or government agencies. While there is no reason a smaller metal center or business cannot look to bonds as a source of expansion capital, a less expensive and more fruitful path involves piggybacking on bonds issued by someone else--usually a state or municipal agency.

Industrial Development Bonds (often referred to as IDBs or IDA bonds) have been around since 1980, when Congress created them in order to spur the development of manufacturing companies by providing capital at rates below what they could get from commercial banks. In 1998, IDBs, previously considered an option for only large companies seeking multi-million dollar loans, got a sleek new look with the creation of the mini-bond program, a program that offers a streamlined application process, capped fees and quick...

View this article FREE - Now for a Limited Time, try Goliath Business News
Free for 3 Days!