12% Interest Is Actually 2%. Here's the Math.

0:00Uh specifically, I need to buy more inventory, and I have a cash flow problem. >> Okay. Is it Is it a Is it a structural issue as in you like the way that your cash flow cycle with your customers >> [clears throat] >> uh it's just delayed? Like you do work, and you get paid like net 90 or something? >> No, I'm e-commerce. So, it's uh honestly, it's probably from some testing marketing that failed, right? I was spending money there. So, I need money now.

0:24>> Yeah, understood. So, um I I don't think that getting investment would be the best call. I would go for So, the nice thing is that there's plenty of lenders that exist that wouldn't dilute you of equity in order to solve this problem. And so, um there's a chain that we're I think we're about to invest in that has 48 locations that does commercial cleaning. Just for context. And uh commercial cleaning, amazing business, really good margins, all the things that I like. Uh only problem is that commercial clients in general tend to pay like net 60, net 90. So, you clean, you do a big parking garage, whatever, and then they pay you 2 or 3 months later, which is a pain in the butt, right? Um And so, uh the founder had all these all these issues around it. But the the core thing is that there's something called AR financing, which is accounts receivable financing. And so, um he was concerned because it's like, "Hey, 12% interest on this stuff. I don't know if uh you know, I want to pay that." And I was like, "Well, we're only going to hold on the money for 2 months.

1:21So, it's 2%. And so, for me, it's like that's not that big of a deal cuz we're not holding on to the money for 12." And so, it's kind of the same situation for you is that there's plenty of uh e-commerce financing solutions for people who need to buy inventory. Cuz this especially happens when you're uh growing quickly. That's not necessarily a situation you have cuz you have some marketing that didn't work. But um there are tons of solutions that exist already. And so, I would just I would just Google um uh lending options and financing options uh for inventory.

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