A NEW YEAR’S RESOLUTION: Reinvent Your Business; Rethink Your Capital Structure

Michael Flock Industry Insights, Recent FLOCK News Leave a Comment

2016

A New Year is a good time to end bad habits, bad relationships, and bad deals.  From a personal perspective, it is good time to refresh yourself, refresh relationships and rethink your goals.   From a business perspective, it is a good time to review results for the past year and review forecasts for the year ahead.

So, too, strategically for businesses in the ARM/Debt Buying/Distressed debt markets it is a good time to reinvent your business model, and rethink your capital structure.

The dramatic collapse of the traditional credit card debt sales market, and the radical restructuring and consolidation of both the collection and debt buying industries caused by the voracious appetite of the CFPB who will devour any company with an iota of compliance issues, have changed our market forever.

This has forced companies to shut their doors, sell, restructure or enter new markets.  As always, however, there are opportunities in this adversity, opportunities to move from the wreckage of the last two years into new emerging segments like online lending, healthcare, and litigation funding, amongst others.

But reinventing your business will require rethinking your capital structure.  Unless you are sitting on a massive war chest of cash somehow, you will need money to enter into new markets and to develop products and solutions for those markets.  Either you will have to build the business from scratch, buy into the market through acquisition, or create a joint venture with an experienced partner with a track record and expertise you can leverage.

Any one of these scenarios will require capital, most likely some form of equity.  At a minimum, you will probably need a financing partner who will advance most of the capital, preferably with flexibility so you can maintain as much control over your business as possible.

Sacrificing control can mean sacrificing creativity, the lifeblood of entrepreneurship. So look far and wide for a finance partner who understands this, who is aligned with your interests. Don’t settle for the first offer as tempting as it may be. Don’t compromise your balance sheet.  Find a finance partner who shares your purpose and your passion.  Remember, it’s not only about the money.

About FLOCK Specialty Finance:

FLOCK Specialty Finance is dedicated to alternative funding in a variety of specialty finance segments. FLOCK’s mission is to provide clients with capital and expertise for the purchase of both charged off debt portfolios as well as for the financing of subprime consumer obligations. FLOCK has funded over 600 portfolios since 2013.

FLOCK believes its funding is “More Than a Transaction”. FLOCK’s proprietary financing structure provides growth-minded clients with a competitive advantage in multiple asset classes. Founded in 2007, FLOCK is headquartered in Atlanta, GA. For additional information, please call: 770-644-0850 or contact us today.

Leave a Reply

Your email address will not be published.