FINDING FUNDING & FACTORING

This brief guide is intended for those who are looking for funding sources. It will also introduce the subject of "factoring" which is being used increasingly as a financing method by small firms.

The Canadian Business Financing Handbook (ARCC HG4027.3.F58 1991, 2 vols.)

The Canadian Reference Directory on Business Planning and Funding

(ARCC HG68.S687)

Formerly known as "The Sources of Funds Index", this book is a major Canadian source.

Corpus Almanac & Canadian Source Book (ARCC AY414.M33)

This source provides quick access to government addresses and phone numbers.

Government Assistance For Canadian Business (ARCC HC120.S9G69, 2 vols.)

Government Assistance Manual (ARCC HD3646.C2G67)

Guide To Canadian Grants & Assistance Programs From Government and Private

Sources (ARCC HD3646.C2G86)

Over 1500 programs are described. Apart from the print version there is also a copy available on disk.

Handbook of Business Finance & Capital Sources (ARCC HG61.R36)

Pratt's Guide To Venture Capital Sources (ARCC HG65.P73)

Sources For Successful Small Business Financing in Canada (ARCC HG4027.7.W55)

The Venture Capital Sourcebook (ARCC HG4751.S553)

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For government funding sources it is often important to have current information. For example, although this period is characterized by funding cutbacks, the Minister of Industry announced on July 27, 1995 that the Business Development Bank was introducing a new financing instrument called "Patient Capital" to provide funding for "new economy" businesses whose main assets are likely to be software or ideas. Current information such as this may be found by using CANLOC. This online service is updated daily and is provided to us through the courtesy of BDI in Halifax. To arrange to have a search of this database inquire at the Circulation Desk.

FACTORING

Factoring is defined as the practice of purchasing and selling accounts receivable invoices at a discount from their face value. According to a recent article in the Globe (Aug. 14, 1995, B5) business using factors can gain the following benefits:

• Increased purchasing power

• Improved cash-flow planning

• Stronger credit rating

• Reduced administrative costs

• No balance sheet liability

• More productive use of management time.

For another Canadian article on the subject see, "Small Firms Find Growth in Factoring: This Old Form of Financing Makes a Comeback", Toronto Star (June 25, 1994, p.E8)

The best source for information on factoring is The Edward's Directory of American Factors (ARCC HG 3752.3.E39). It contains material on almost 200 factors-including data on size, rate structure, contract terms and operating practices. Articles may be easily located by searching the cd-rom database BPO and using the following approach. -- Type SU (factoring). Listed below are a few examples:

"Goodbye Lending ... Hello Factoring", Director, Jan. 1995.

"Your Factoring Questions Answered", Director, Jan. 1995.

"Taking the Fear Out of Factor Financing", CA Magazine, Dec. 1994.

"Financing Through Factoring", Small Business Reports, July 1994.

For those interested in the evolution of government funding programs, a study done here at the Western Business School about a decade ago provides useful background information. See Government Loan Guarantee Programs For Small Business, Hatch, Wynant & Grant (ARCC HG4027.7.H37 1985).