Venture Capital Loans
Venture Capital Loans or Venture Capital Funding is generally where money is advanced to finance early stage businesses with strong growth potential. Usually, these type businesses are not presently making money. In order for TABASFUNDING to help, generally one needs to be in business and have existing sales of at least several hundred thousand dollars annually.
Qualifications Necessary For Venture Capital Funding
One example of our Venture Capital funding is the loan that we’ve provided for a healthcare company that is in the process of rapid expansion. The company needs to obtain FDA approval for expansion, which takes 9 months to a year. During that time, the firm needs to be operating, and has personnel, rent, and other expenses, but no income from the expanded locations. Our loan is interest only for two years, and then is repaid monthly over 3 years.
Looking for a Venture Capital Loan?
Generally, we don’t provide funding for startup businesses where there are no sales. The exceptions may be where someone has extensive experience, and is then going to start their own company in their field. We might consider funding if the story is compelling.
In our definition, Venture Capital funding can be either equity, which means that the investor owns stock in the company; debt, which means that the funder provides money with an interest return; or some combination of both. Our funding is Mezzanine debt, which means that our return is a fixed interest rate plus a formula where we can obtain a bit more interest if the business is doing well.
Advantages and Disadvantages of Acquiring a Venture Capital Investor
There are pluses and minuses of each type of funding. The plus of equity is that the business usually only needs to pay the investor when things are going well. The negative is that if things are going well, the investor owns a piece of the company, which can result in a big windfall – look at Uber or Air B and B.
Debt means that the money is borrowed, there will be interest to pay and that the principal needs to be repaid. The upside of debt is that the borrower is able to repay the debt and doesn’t give up ownership in his or her company. With TABASFUNDING, personal guarantees of the debt are required. From our point of view, borrowers need to be confident enough in what they are doing to stand behind it (guarantee). Please see the “Frequently Asked Questions” section for general terms.