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To: Q. who wrote (575)7/22/1998 9:11:00 AM
From: mod  Read Replies (1) | Respond to of 994
 
<<re. getting started: they would have to finance their inventory, production and distribution costs. All of these cash costs would be incurred before they got to have any receivables. >>

But they already have a lot of inventory, sitting around at customer sites and in their offices. So they can immediately ship quite a bit of product, if and when they can get it to work. I'd guess at least $10 million worth of sales is possible without any new production, based on their reported inventory levels.

I agree, receivables financing alone is not enough, but they could use other debt-based financing for growth. Once they can demonstrate a willingness to pay on the part of their customers, their options expand tremendously. If the customers won't pay, then they have few options.

Dennis