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How do I do this?

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Trader60611

posts: 5

Aug 15, 2008 12:29 PM ET Quote Report Abuse

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Two friends of mine are starting a business, selling a product and shipping it from point A to Point B. I have agreed to consider financing the SHIPPING portion of their business. This could be from 4 to 10 truckloads per month. My accountant has directed me to get a signed note for each separate sum (truckload) that I loan them. This seems a bit complicated, and he did not suggest a means of "marrying" the loan to the truckload. Are there any other ideas on how to do this? Also, are there specific, reliable means to check a party`s credit? The assumption here is that they are willing to have me run a credit check.

Thanks...
Trader60611

prefcapital

posts: 6

Aug 15, 2008 1:24 PM ET Quote Report Abuse

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Have you considered using letters of credit or actually in your case requring them? The receiving party would need to have a letter of credit posted and as soon as the goods are accepted then it would be released with the payment to you/your partners, significantly minimizing your risks. The letter of credits are widely used internationally, but in this type of business domestically it might be a great choice as well. The clients can talk to their banks to arrange for them to be issued.

I hope this helps.

-------------------------

Tiana Nelson, MBA, CMA, CFM
Summit Executive Center
http://www.summitbldg.com

Trader60611

posts: 5

Aug 15, 2008 5:36 PM ET Quote Report Abuse

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Tiana

I would love to speak to you about this. Perhaps you could email me a contact number.

Manny

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