Originally Posted by
Dentie
Don't want to argue this point, however factoring is not a loan and the criteria is nothing like "lending criteria" and, while on the subject, either is Invoice Assignment. They are just different forms of cash flow financing techniques which are very popular. They are commonly misunderstood - even by Accountants and Lawyers - and, if used properly, are not necessarily expensive.
If they tried to get normal debt financing they would have to pay interest but, as you correctly mention, the lending criteria would exclude them (no tangible asset to lend against) unless a lender is happy to lend against Patents etc.
Do you think there wouldn't be a price to pay if they again go via the Equity road(CR)? I am sure existing shareholders love having their holding diluted....how does that compare with a bit of interest?
If I was DD, I would even explore exchanging a bit of cash for some of those juicy tax losses. He only needs to buy a bit more time...the wait appears to be going to be worth it.