Working Capital
Venture Asset Growth - PP&E / AR
The PP&E for this type of venture should not really need much investment in order to scale up, the AR however, will certainly grow as along with the reach and size of the marketplace. Depending on how we determine the payment agreement, we may need to collect our free from the PMs as they collect and deposit the rent checks from all tenants within the RE co-operative. If we were to create a payment processing system that allowing the finances to pass through us first and then went to the PM, we could eliminate the need for AR and collect right off the top. However, this is unlikely unless we change the paradigm of how rents are paid, shifting it from checks to ACH electronic transfers.
Asset-backed Lines of Credit (e.g. Working Capital)
The AR assets may be amenable to such a line of credit, but the benefit of such a business is that we are not purchasing or holding any inventory and are just to worry about the balance between AP and AR. I suspect that our DPO would eventually be greater than our DSO and would allow us to have a negative cash conversion cycle (i.e. an instant CCC), requiring little reliance on a working capital LOC.
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