NFIB

Innovative Financing Sources for Web Site Development
04/ 15/ 2002

When Gordon Cameron, president and CEO of QuickCARE, a Dallas-based software development company with facilities in 27 states, decided in the fall of 1998 that his company needed a top-line Web site, estimates for creation of the site came in above $30,000. Because he didn't want to tie up resources, he began looking for sources of financing.

"The trouble was," said Cameron, "banks required collateral and personal guarantees, even though we were a 3-year-old company with a good track record. They didn't want to use the Web site as collateral, because it isn't tangible property."

Instead, Cameron found financing through the leasing service with which he had already developed a solid relationship. In today's Workshop, Jeffrey Moses discusses details of this unique financing source for Web site development.

Cameron spoke with his leasing agent, Steve Fix, of LeaseSource, Inc., located in Atlanta (800-422-8328), and they worked out a lease/purchase financing arrangement that would fund $25,000 of the site's development. The financing would extend for three years, at which time Cameron would own the site outright, with no further payments due.

LeaseSource offered several attractive benefits. While they specialize in financing brick and mortar companies expanding to online sales, they do not ask for collateral such as buildings, assets or receivables; they do not require extensive business plans or cash statements; and they do not require a lengthy decision period. "The funding was approved in one day," Cameron said.

Information required by LeaseSource included only the names, addresses and Social Security numbers of the company's principals, banking reference with a two-year history, trade accounts and a description of the proposed Web site. LeaseSource ran a vendor profile on the Web developer (as it would with any developer), securing a Dun & Bradstreet report. This research protects the finances of both LeaseSource and its customers.

"We provide financing from $10,000 to $100,000," said Fix. "We pay the supplier in progress payments when required, because often service providers such as Web developers usually need ongoing financing of their work."

Cameron is pleased with the outcome of the site and its financing. "It was a great deal for us because we needed the cash at the time, and rather than tie it up, we could extend our payments over time."

If your business is faced with an expensive development project, consider all of your options before writing a check to cover the costs. You may find that outside financing is the way for you to go.

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