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This testing (NAT) or nucleic acid amplification test (NAAT) is one of the advanced diagnostic test increasingly gaining traction over conventional culture methods, owing to high efficiency and accuracy. Furthermore, This testing has potential application in various life threating diseases including cancer, infectious disease, genetic and mitochondrial disorders, and also in development of personalized and precision medicine. NAT is an efficient diagnostic method, which significantly reduces the procedural time and consumption of reagents. Moreover, this testing is increasingly being used for screening blood donation samples to reduce the risk of transfusion transmitted infections (TTIs), thus aiding in growth of the nucleic acid testing market.Nucleic Acid Testing Market – DriverThese tests are extensively used for screening and diagnosis of various infectious diseases. Moreover, growing prevalence of infectious diseases and management of epidemics of new diseases has led to increasing demand for advanced diagnostic tests such as nucleic acid testing. For instance, according to the World Health Organization (WHO), in 2015, around 32,000 estimated deaths from tuberculosis and around 3, 23,000 new cases of TB were registered in the European region. Furthermore, according to the Centers for Disease Control and Prevention (CDC), around 5,251 deaths due to influenza infection were registered in 2015, in the U.S. According to the National Ambulatory Medical Care Survey: 2015 data findings, 16.8 million visits to physician offices for infectious and parasitic diseases were registered in the U.S. Nucleic acid testing (NAT) enables to examine various changes in gene sequence and copy number, and provides information regarding disease recurrence and possible condition of patient to likely respond to a particular treatment. Moreover, NAT can identify, which patient have undergone inherited mutations, which eventually helps to identify whether the patient is at increased risk of developing cancer or not. Increasing incidence of cancer in various geographical areas is a major driving factor for growing adoption of nucleic acid testing. For instance, according to the Cancer Atlas: 2017, there were an estimated 14.1 million new cancer cases in 2012. Moreover, India, China, and other East and Central Asian countries accounted for nearly half of world’s new cancer cases and deaths, in 2017. Furthermore, according to the same source, by 2025, there will be an estimated 19.3 million new cancer cases and 11.4 million cancer deaths, in less developed regions.Moreover, research funding by various government and private organizations for cancer treatment and increasing adoption of molecular and nucleic acid testing in cancer research programs, to detect molecular genetic changes in single or multiple sequence of DNA or mutations is expected to aid in growth of the nucleic acid testing market, in the near future. In 2016, National Cancer Institute (NCI) invested US$ 3.9 billion for cancer research activities, which accounts for 70.8% of overall NCI 2016 budget. Among which NCI invested around US$ 533 million on cancer detection and diagnostic research activities. Moreover, in 2016, NCI allocated 40.4% of its funds for Research Project Grants (RPGs). Furthermore, in 2017, NCI budget increased by US$ 454 million (8.7%) from previous year (2016) for research activities.Request for Customization @ https://www.coherentmarketinsights.com/ongoing-insight/toc/1644Market – RestraintThe inability or difficulty of nucleic acid testing in obtaining quantitative results from a large pool of clinical sample, difficulty of using NAT test for susceptibility testing, and higher cost of nucleic acid testing devices is expected to hamper growth of the nucleic acid testing market. According to the data published in Asian Journal of Transfusion Science, in February 2014, NAT is highly sensitive and advanced technique, however, it is associated with high cost and requires dedicated infrastructure facility, equipment, consumables, and technical expertise.Market – Regional AnalysisGeographically, global nucleic acid testing market is segmented into North America, Latin America, Europe, Middle East, Asia Pacific, and Africa. North America holds dominant position in nucleic acid testing market, followed by Europe. This is owing to increasing research and development studies by various government and pharmaceutical organizations in infectious disease and cancer diagnosis in North America. For instance, in January 2018, University of Glasgow-led project received US$ 1.85 million funding, which is a part of Global Challenges Research Fund (GCRF). This project will develop new tests for parasitic diseases and rapid testing in remote locations to help enable rapid diagnosis, and rapid treatment of infectious disease. Furthermore, high prevalence and awareness of cancer among people, in turn opting for early detection of cancer, is expected to aid in growth of the nucleic acid testing market in this region. For instance, according to American Cancer Society, data findings, North America registered higher incidence of cancer in children compared to any other region, in 2012. Moreover, North America accounted for 13.1% of total estimated cases of cancer, in 2012, globally, according to the same source.Asia Pacific is expected to witness fastest growth in the nucleic acid testing market over the forecast period. This is due to growing demand for efficient and quick diagnostic testing and increasing focus of major market players to expand their geographical reach in this region. For instance, in March 2013, Qiagen N.V. launched its careHPV test in China. careHPV is molecular diagnostic test designed to screen for high risk human papillomavirus (HPV) for low-resource settings such as areas lacking electricity, water or laboratories. Qiagen also gained the approval from China’s State Food and Drug Administration (SFDA) for careHPV in 2012.Market – Competitive AnalysisKey market players in nucleic acid testing market are Abbott Laboratories, Beckman Coulter, Inc., Becton, Dickinson and Company, BioMérieux SA, Bio-Rad Laboratories, Inc., F. Hoffmann-La Roche Ltd., Grifols, S.A., Illumina, Inc., Novartis Ag, Qiagen N.V., Quest Diagnostics Incorporated, Siemens Ag, and Tecan Group Ltd., among others. Players in the market are focusing on inorganic growth strategies, in order to enhance its market share and remain competitive in the market. For instance, in January 2017, Grifols, S.A. acquired the NAT (Nucleic Acid Testing) donor screening unit from Hologic, Inc. for US$ 1,850 million. The acquisition enabled Grifols to strengthen its position in transfusion medicine through NAT technology.Market – TaxonomyBy Product Type
Test Kits

Polymerase Chain Reaction(PCR)

Ligase Chain Reaction(LCR)

Transcription-mediated Amplification (TMA)

Whole Genome Sequencing

Consumables
By Indication
Infectious Disease

Cancer

Forensic Testing

Personalized Medicine

Others

By End User
Hospitals & Clinics

Pathology Laboratories

Academic & Research Organization

By Geography:
North America

Latin America

Europe

Asia Pacific

Middle East

Africa

About Coherent Market Insights:Coherent Market Insights is a prominent market research and consulting firm offering action-ready syndicated research reports, custom market analysis, consulting services, and competitive analysis through various recommendations related to emerging market trends, technologies, and potential absolute dollar opportunity.Contact Us:Mr. ShahCoherent Market Insights1001 4th Ave, #3200Seattle, WA 98154Tel: +1-206-701-6702Email: [email protected]

Many people say that the business drives the technology whereas some people say that the technology drives the business. It is really unknown that which is really responsible for what and I must say that the emergence of the information technology has really made it even more complex. All the people who are involved in the business as well as the technology are really in dilemma that which theory is correct. However I have different ideas. I feel that sometimes the technology drives the business and sometimes the business drives the technology. In fact it is right to say that the business and technology are interdependent. I would like to prove the same with the help of this article.Just think that when it was decided that each company should have a board of directors. I must say that this is really a very old practice. Even the ancient Romans too had this in their administration. I really feel that this indicate that the technology came afterwards and hence business need lead to the evolution of the technology. For example the telegraph became famous because of the Reuters. In deed it was the biggest news agency in the world which first used the telegraph for their work. There are many more examples.The industrial revolution which brought about the great change in the field of the business was ignited due to the invention of the steam engine. This really made the world of business grow fore fold throughout the world. This gives us the indication that the technology played an important role for business to become global. In fact the technology is responsible for the globalization of the business.But this does not mean that the technology drives the business. Yes, you can say that the technology increases the speed at which the business activities are performed. But saying that the business is driven by the technology is still not correct.Let me explain you another side of this topic. You know why the telegraph was discovered. Yes this happened because the world of business needed this. The Reuters were the first to use the telegraph and they become the best in the world. Hence can we say that the technology works as the cutting edge so that one business leads over the other? Yes this is really the truth and this time we are absolutely right. This is really the main thing about the relationship between the technology and the business.One can only say that with the help of technology you can win the race which is on among the rivalry businessmen. Let’s think about the issue of the first paragraph and I am quiet confident to say that sometimes the business is driven by the technology and sometimes the technology comes into vicinity because of the business needs.

Entertainment promotions let you deliver licensed entertainment content to your audience. By attaching your products to popular television shows, Hollywood blockbusters, and chart-topping music artists, you can leverage their popularity to build exposure for your brand. By giving consumers a chance to download free music, video games, skins, and ringtones, you’ll capture their attention and expose them to your products. You’ll also cultivate their loyalty, which increases your product sales over the long run.Entertainment promotions are flexible. They can be customized and fine-tuned to fit your marketing strategy. For example, suppose you want to promote a line of clothing to the 50+ crowd. Launch a campaign that gives your audience a chance to download three free classic rock songs. Or, suppose you would like to market a line of shoes to the 14-18 segment. You can tap into that demographic with promotions that offer licensed content through ringtones, video games, and skins.Below, you’ll discover why entertainment promotions are so powerful in triggering a response from your market. We’ll explain how they boost your sales, improve customer loyalty, and drive your brand’s success. You’ll also learn how to leverage entertainment promotions to collect valuable information about your audience.Entertainment Promotions Tap Into Your Market’s Consumption PatternsYour target audience already enjoys movies, television programs, music, and in some cases, video games. By using licensed content from each of these channels, you can create digital promotions that tap into their consumption patterns. That gives you an ideal vehicle for exposing consumers to your brand.For example, imagine distributing in-package cards that offer consumers ten free song downloads from popular artists such as Miley Cyrus, Kelly Clarkson, Jay-Z, and Taylor Swift (among hundreds of others). Drive these consumers to a customized, branded landing page that exposes them to your products and collects their contact information.Radio promotions can be used to improve your brand’s exposure. Music producers and record labels launch their artists’ new songs on the radio in order to reach millions of fans. Design entertainment promotions that support these releases while introducing your products to a massive audience.Entertainment Promotions Increase Your Sales And Customer LoyaltyOne of the biggest hurdles for brand owners is penetrating a market and building awareness for their products. Both are precursors to increasing sales and improving customer loyalty. The problem is, people are bombarded with an endless stream of advertisements. Penetrating a market often requires using an existing channel to reach a given segment.Entertainment promotions leverage existing marketing channels to deliver licensed content to a hungry audience. Custom promotions that attach your products to a popular entertainment property can be tailor-made to fit your marketing strategy. Whether you’re targeting tweens, adult males, or country music fans, you can excite your audience by offering free songs, skins, ringtones, and similar digital incentives. Not only does this help introduce your products to a motivated audience, but it encourages their loyalty. And that drives long-term sales.Use Entertainment Promotions To Collect Customer InformationWhile boosting awareness of your brand and lifting sales are important, there is another reason to use an entertainment promotion: to collect valuable customer information. This data can be a potent resource for identifying consumer preferences. Once you know what your audience prefers, you can design these promotions that cater specifically to those preferences. This all but guarantees they’ll respond to your marketing campaigns.For example, suppose you’re promoting a chain of restaurants to lift chain-wide sales. You’re giving customers who spend $50 or more a chance to download free songs from their favorite artists. Over time, you’ll be able to track who receives your entertainment promotions and the music artists they prefer. With this information, you can refine future campaigns to highlight artists that are popular with your restaurants’ customers.Entertainment Promotions: A Proven Solution For Brand SuccessThere are many ways to stimulate sales for your products and improve awareness of your brand. Unfortunately, most advertising channels are extremely expensive. These promotions are a cost-effective strategy for lifting sales and driving your brand’s success. Because the digital incentives are delivered online, costs are minimized and the results are easy to track. What’s more, you’ll be able to collect valuable customer data that will help you refine future marketing campaigns.Entertainment promotions, when executed properly, complement your existing brand promotions and customer loyalty programs. They can play a critical role in your brand’s long-term success.

Summary
SPDN is not the largest or oldest way to short the S&P 500, but it’s a solid choice.
This ETF uses a variety of financial instruments to target a return opposite that of the S&P 500 Index.
SPDN’s 0.49% Expense Ratio is nearly half that of the larger, longer-tenured -1x Inverse S&P 500 ETF.
Details aside, the potential continuation of the equity bear market makes single-inverse ETFs an investment segment investor should be familiar with.
We rate SPDN a Strong Buy because we believe the risks of a continued bear market greatly outweigh the possibility of a quick return to a bull market.
Put a gear stick into R position, (Reverse).
Birdlkportfolio

By Rob Isbitts

Summary
The S&P 500 is in a bear market, and we don’t see a quick-fix. Many investors assume the only way to navigate a potentially long-term bear market is to hide in cash, day-trade or “just hang in there” while the bear takes their retirement nest egg.

The Direxion Daily S&P 500® Bear 1X ETF (NYSEARCA:SPDN) is one of a class of single-inverse ETFs that allow investors to profit from down moves in the stock market.

SPDN is an unleveraged, liquid, low-cost way to either try to hedge an equity portfolio, profit from a decline in the S&P 500, or both. We rate it a Strong Buy, given our concern about the intermediate-term outlook for the global equity market.

Strategy
SPDN keeps it simple. If the S&P 500 goes up by X%, it should go down by X%. The opposite is also expected.

Proprietary ETF Grades
Offense/Defense: Defense

Segment: Inverse Equity

Sub-Segment: Inverse S&P 500

Correlation (vs. S&P 500): Very High (inverse)

Expected Volatility (vs. S&P 500): Similar (but opposite)

Holding Analysis
SPDN does not rely on shorting individual stocks in the S&P 500. Instead, the managers typically use a combination of futures, swaps and other derivative instruments to create a portfolio that consistently aims to deliver the opposite of what the S&P 500 does.

Strengths
SPDN is a fairly “no-frills” way to do what many investors probably wished they could do during the first 9 months of 2022 and in past bear markets: find something that goes up when the “market” goes down. After all, bonds are not the answer they used to be, commodities like gold have, shall we say, lost their luster. And moving to cash creates the issue of making two correct timing decisions, when to get in and when to get out. SPDN and its single-inverse ETF brethren offer a liquid tool to use in a variety of ways, depending on what a particular investor wants to achieve.

Weaknesses
The weakness of any inverse ETF is that it does the opposite of what the market does, when the market goes up. So, even in bear markets when the broader market trend is down, sharp bear market rallies (or any rallies for that matter) in the S&P 500 will cause SPDN to drop as much as the market goes up.

Opportunities
While inverse ETFs have a reputation in some circles as nothing more than day-trading vehicles, our own experience with them is, pardon the pun, exactly the opposite! We encourage investors to try to better-understand single inverse ETFs like SPDN. While traders tend to gravitate to leveraged inverse ETFs (which actually are day-trading tools), we believe that in an extended bear market, SPDN and its ilk could be a game-saver for many portfolios.

Threats
SPDN and most other single inverse ETFs are vulnerable to a sustained rise in the price of the index it aims to deliver the inverse of. But that threat of loss in a rising market means that when an investor considers SPDN, they should also have a game plan for how and when they will deploy this unique portfolio weapon.

Proprietary Technical Ratings
Short-Term Rating (next 3 months): Strong Buy

Long-Term Rating (next 12 months): Buy

Conclusions
ETF Quality Opinion
SPDN does what it aims to do, and has done so for over 6 years now. For a while, it was largely-ignored, given the existence of a similar ETF that has been around much longer. But the more tenured SPDN has become, the more attractive it looks as an alternative.

ETF Investment Opinion

SPDN is rated Strong Buy because the S&P 500 continues to look as vulnerable to further decline. And, while the market bottomed in mid-June, rallied, then waffled since that time, our proprietary macro market indicators all point to much greater risk of a major decline from this level than a fast return to bull market glory. Thus, SPDN is at best a way to exploit and attack the bear, and at worst a hedge on an otherwise equity-laden portfolio.

Your stocks to watch for the week ahead are Cheniere Energy (LNG), S&P 500 biotech giant Vertex Pharmaceuticals (VRTX), Cardinal Health (CAH), Steel Dynamics (STLD) and Genuine Parts (GPC).

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While the market remains in correction, with analysts and investors wary of an economic downturn, these five stocks are worth adding to watchlists. S&P 500 medical giants Vertex and Cardinal Health have been holding up, as health-care related plays tend to do well in down markets.

Steel Dynamics and Genuine Parts are both coming off strong earnings as both the steel and auto parts industries report optimistic outlooks. Meanwhile, Cheniere Energy saw sales boom in the second quarter as demand in Europe for natural gas continues to grow.

Major indexes have been making rally attempts with the Dow Jones and S&P 500 testing weekly support on Friday. With market uncertainty, investors should be ready for follow-through day breakouts and keep an eye on these stocks.

Cheniere Energy, Cardinal Health and VRTX stock are all on IBD Leaderboard.

Cheniere Energy Stock
LNG shares rose 1.1% to 175.79 during Friday’s market trading. On the week, the stock advanced 3.1%, not from highs, bouncing from its 21-day and 10-week lines earlier in the week.

Cheniere Energy has been consolidating since mid-September, but needs another week to forge a proper base, with a potential 182.72 buy point formed on Aug. 10.

Houston-based Cheniere Energy was IBD Stock Of The Day on Thursday, as the largest U.S. producer of liquefied natural gas eyes strong demand in Europe.

Even though natural gas prices are plunging in the U.S. and Europe, investors still see strong LNG demand for Cheniere and others.

The U.K. government confirmed last week that it is in talks for an LNG purchase agreement with a number of companies, including Cheniere.

In the first half of 2021, less than 40% of Cheniere’s cargoes of LNG landed in Europe. That jumped to more than 70% through this year’s second quarter, even as the company ramped up new export capacity. The urgency of Europe’s natural gas shortage only intensified last month. That is when an explosion disabled the Nord Stream 1 pipeline from Russia that had once supplied 40% of the European Union’s natural gas.

In Q2, sales increased 165% to $8 billion and LNG earned $2.90 per share, up from a net loss of $1.30 per share in Q2 2021. The company will report Q3 earnings Nov. 3, with investors seeing booming profits for the next few quarters.

Cheniere Energy has a Composite Rating of 84. It has a 98 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share price movement with a 1 to 99 score. The rating shows how a stock’s performance over the last 52 weeks holds up against all the other stocks in IBD’s database. The EPS rating is 41.

Vertex Stock
VRTX stock jumped 3.4% to 300 on Friday, rebounding from a test of its 50-day moving average. Shares climbed 2.2% for the week. Vertex stock has formed a tight flat base with an official buy point of 306.05, according to MarketSmith analysis.

The stock has remained consistent over recent weeks, while the relative strength line has trended higher. The RS line tracks a stock’s performance vs. the S&P 500 index.

Vertex Q3 earnings are on due Oct. 27. Analysts see EPS edging up 1% to $3.61 per share with sales increasing 16% to $2.2 billion, according to FactSet.

The Boston-based global biotech company dominates the cystic fibrosis treatment market. Vertex also has other products in late-stage clinical development that target sickle cell disease, Type 1 diabetes and certain genetically caused kidney diseases. That includes a gene-editing partnership with Crispr Therapeutics (CRSP).

In early August, Vertex reported better-than-expected second-quarter results and raised full-year sales targets.

S&P 500 stock Vertex ranks second in the Medical-Biomed/Biotech industry group. VRTX has a 99 Composite Rating. Its Relative Strength Rating is 94 and its EPS Rating is 99.

CRISPR Stocks: Will Concerns Over Risk Inhibit Gene-Editing Cures?

Cardinal Health Stock
CAH stock advanced 3.2% to 73.03 Friday, clearing a 71.22 buy point from a shallow cup-with-handle base and hitting a record high. But volume was light on the breakout. CAH stock leapt 7.3% for the week.

Cardinal Health stock’s relative strength line has also been trending up for months.

The cup-with-handle base is part of a base-on-base pattern, forming just above a cup base cleared on Aug. 11.

Cardinal Health, based in Dublin, Ohio, offers a wide assortment of health care services and medical supplies to hospitals, labs, pharmacies and long-term care facilities. The company reports that it serves around 90% of hospitals and 60,000 pharmacies in the U.S.

S&P 500 stock Cardinal Health will report Q1 2023 earnings on Nov. 4. Analysts forecast earnings falling 26% to 96 cents per share. Sales are expected to increase 10% to $48.3 billion, according to FactSet.

Cardinal Health stock ranks first in the Medical-Wholesale Drug/Supplies industry group, ahead of McKesson (MCK), which is also showing positive action. CAH stock has a 94 Composite Rating out of 99. It has a 97 Relative Strength Rating and an EPS rating of 73.

Steel Dynamics Stock
STLD shares shot up 8.5% to 92.92 on Friday and soared 19% on the week, coming off a Steel Dynamics earnings beat Wednesday night.

Shares blasted above an 88.72 consolidation buy point Friday after clearing a trendline Thursday. STLD stock is 17% above its 50-day line, definitely extended from that key average.

Steel Dynamics’ latest consolidation could be seen as part of a larger base going back six months.

Steel Dynamics topped Q3 earnings views with EPS rising 10% to $5.46 while revenue grew 11% to $5.65 billion. The steel producer’s outlook is optimistic despite weaker flat rolled steel pricing. STLD reports its order activity and backlogs remain solid.

The Fort Wayne, Indiana-based company is among the largest producers of carbon steel products in the U.S. It engages in metal recycling operations along with steel fabrication and produces myriad steel products.

How Millett Grew Steel Dynamics From A Three Employee Business

STLD stock ranks first in the Steel-Producers industry group. STLD stock has a 96 Composite Rating out of 99. It has a 90 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share-price movement that tops at 99. The rating shows how a stock’s performance over the last 52 weeks holds up against all the other stocks in IBD’s database. The EPS rating is 98.

Genuine Parts Stock
GPC stock gained 2.8% to 162.35 Friday after the company topped earnings views with its Q3 results on Thursday. For the week GPC advanced 5.1% as the stock held its 50-day line and is in a flat base.

GPC has an official 165.09 flat-base buy point after a three-week rally, according to MarketSmith analysis.

The relative strength line for Genuine Parts stock has rallied sharply to highs over the past several months.

On Thursday, the Atlanta-based auto parts company raised its full-year guidance on growth across its automotive and industrial sales.

Genuine Parts earnings per share advanced 19% to $2.23 and revenue grew 18% to $5.675 billion in Q3. GPC’s full-year guidance is now calling for EPS of $8.05-$8.15, up from $7.80-$7.95. The company now forecasts revenue growth of 15%-16%, up from the earlier 12%-14%.

During the Covid pandemic, supply chain constraints caused a major upheaval in the auto industry, sending prices for new and used cars to record levels. This has made consumers more likely to hang on to their existing vehicles for longer, driving mileage higher and boosting demand for auto replacement parts.

Fellow auto stocks O’Reilly Auto Parts (ORLY) and AutoZone (AZO) have also rallied near buy points amid the struggling market. O’Reilly reports on Oct. 26.

IBD ranks Genuine Parts first in the Retail/Wholesale-Auto Parts industry group. GPC stock has a 96 Composite Rating. Its Relative Strength Rating is 94 and it has an EPS Rating of 89.

US Markets were trading in the green on Friday with Dow 30 trading at 30,678.80, up by 1.14%. While S&P 500 was trading at 3,701.66, up by 0.98% and Nasdaq Composite 10,690.60 was also up by 0.71 per cent

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US Markets in green on Friday; Dow 30 up over 345 points, Nasdaq Composite, S&P 500 up nearly 1%
Earlier today, Indian stock markets ended the week on a winning note. It was the sixth straight gains for equity markets. Source: Reuters
US Markets were trading in the green on Friday with Dow 30 trading at 30,678.80, up by 345.25 points or1.14 per cent. While S&P 500 was trading at 3,701.66, up by 35.88 points or 0.98 per cent and Nasdaq Composite 10,690.60 was also up 75.75 points or 0.71 per cent. A Reuters report said that today’s strength was on the back of a report which said the Federal Reserve will likely debate on signaling plans for a smaller interest rate hike in December, reversing declines set off by social media firms after Snap Inc’s ad warning.

Source: Comex

Nasdaq Top Gainers and Losers

Source: Nasdaq

Earlier today, Indian stock markets ended the week on a winning note. It was the sixth straight gains for equity markets. The BSE Sensex ended at 59,307.15, up by 104.25 points or 0.18 per cent from the Thursday closing level. Meanwhile, the Nifty50 index closed at 17,590.00, higher by 26.05 points or 0.15 per cent. In the 30-share Sensex, 13 stocks gained while the remaining 17 ended on the losing side. In the 50-stock Nifty50, 21 stocks advanced while 29 declined.

There are several potential financing options available to cash-strapped businesses that need a healthy dose of working capital. A bank loan or line of credit is often the first option that owners think of – and for businesses that qualify, this may be the best option.

In today’s uncertain business, economic and regulatory environment, qualifying for a bank loan can be difficult – especially for start-up companies and those that have experienced any type of financial difficulty. Sometimes, owners of businesses that don’t qualify for a bank loan decide that seeking venture capital or bringing on equity investors are other viable options.

But are they really? While there are some potential benefits to bringing venture capital and so-called “angel” investors into your business, there are drawbacks as well. Unfortunately, owners sometimes don’t think about these drawbacks until the ink has dried on a contract with a venture capitalist or angel investor – and it’s too late to back out of the deal.

Different Types of Financing

One problem with bringing in equity investors to help provide a working capital boost is that working capital and equity are really two different types of financing.

Working capital – or the money that is used to pay business expenses incurred during the time lag until cash from sales (or accounts receivable) is collected – is short-term in nature, so it should be financed via a short-term financing tool. Equity, however, should generally be used to finance rapid growth, business expansion, acquisitions or the purchase of long-term assets, which are defined as assets that are repaid over more than one 12-month business cycle.

But the biggest drawback to bringing equity investors into your business is a potential loss of control. When you sell equity (or shares) in your business to venture capitalists or angels, you are giving up a percentage of ownership in your business, and you may be doing so at an inopportune time. With this dilution of ownership most often comes a loss of control over some or all of the most important business decisions that must be made.

Sometimes, owners are enticed to sell equity by the fact that there is little (if any) out-of-pocket expense. Unlike debt financing, you don’t usually pay interest with equity financing. The equity investor gains its return via the ownership stake gained in your business. But the long-term “cost” of selling equity is always much higher than the short-term cost of debt, in terms of both actual cash cost as well as soft costs like the loss of control and stewardship of your company and the potential future value of the ownership shares that are sold.

Alternative Financing Solutions

But what if your business needs working capital and you don’t qualify for a bank loan or line of credit? Alternative financing solutions are often appropriate for injecting working capital into businesses in this situation. Three of the most common types of alternative financing used by such businesses are:

1. Full-Service Factoring – Businesses sell outstanding accounts receivable on an ongoing basis to a commercial finance (or factoring) company at a discount. The factoring company then manages the receivable until it is paid. Factoring is a well-established and accepted method of temporary alternative finance that is especially well-suited for rapidly growing companies and those with customer concentrations.

2. Accounts Receivable (A/R) Financing – A/R financing is an ideal solution for companies that are not yet bankable but have a stable financial condition and a more diverse customer base. Here, the business provides details on all accounts receivable and pledges those assets as collateral. The proceeds of those receivables are sent to a lockbox while the finance company calculates a borrowing base to determine the amount the company can borrow. When the borrower needs money, it makes an advance request and the finance company advances money using a percentage of the accounts receivable.

3. Asset-Based Lending (ABL) – This is a credit facility secured by all of a company’s assets, which may include A/R, equipment and inventory. Unlike with factoring, the business continues to manage and collect its own receivables and submits collateral reports on an ongoing basis to the finance company, which will review and periodically audit the reports.

In addition to providing working capital and enabling owners to maintain business control, alternative financing may provide other benefits as well:

It’s easy to determine the exact cost of financing and obtain an increase.
Professional collateral management can be included depending on the facility type and the lender.
Real-time, online interactive reporting is often available.
It may provide the business with access to more capital.
It’s flexible – financing ebbs and flows with the business’ needs.
It’s important to note that there are some circumstances in which equity is a viable and attractive financing solution. This is especially true in cases of business expansion and acquisition and new product launches – these are capital needs that are not generally well suited to debt financing. However, equity is not usually the appropriate financing solution to solve a working capital problem or help plug a cash-flow gap.

A Precious Commodity

Remember that business equity is a precious commodity that should only be considered under the right circumstances and at the right time. When equity financing is sought, ideally this should be done at a time when the company has good growth prospects and a significant cash need for this growth. Ideally, majority ownership (and thus, absolute control) should remain with the company founder(s).

Alternative financing solutions like factoring, A/R financing and ABL can provide the working capital boost many cash-strapped businesses that don’t qualify for bank financing need – without diluting ownership and possibly giving up business control at an inopportune time for the owner. If and when these companies become bankable later, it’s often an easy transition to a traditional bank line of credit. Your banker may be able to refer you to a commercial finance company that can offer the right type of alternative financing solution for your particular situation.

Taking the time to understand all the different financing options available to your business, and the pros and cons of each, is the best way to make sure you choose the best option for your business. The use of alternative financing can help your company grow without diluting your ownership. After all, it’s your business – shouldn’t you keep as much of it as possible?

Business loans and finance for a business just may have gotten good again? The pursuit of credit and funding of cash flow solutions for your business often seems like an eternal challenge, even in the best of times, let alone any industry or economic crisis. Let’s dig in.

Since the 2008 financial crisis there’s been a lot of change in finance options from lenders for corporate loans. Canadian business owners and financial managers have excess from everything from peer-to-peer company loans, varied alternative finance solutions, as well of course as the traditional financing offered by Canadian chartered banks.

Those online business loans referenced above are popular and arose out of the merchant cash advance programs in the United States. Loans are based on a percentage of your annual sales, typically in the 15-20% range. The loans are certainly expensive but are viewed as easy to obtain by many small businesses, including retailers who sell on a cash or credit card basis.

Depending on your firm’s circumstances and your ability to truly understand the different choices available to firms searching for SME COMMERCIAL FINANCE options. Those small to medium sized companies ( the definition of ‘ small business ‘ certainly varies as to what is small – often defined as businesses with less than 500 employees! )

How then do we create our road map for external financing techniques and solutions? A simpler way to look at it is to categorize these different financing options under:

Debt / Loans

Asset Based Financing

Alternative Hybrid type solutions

Many top experts maintain that the alternative financing solutions currently available to your firm, in fact are on par with Canadian chartered bank financing when it comes to a full spectrum of funding. The alternative lender is typically a private commercial finance company with a niche in one of the various asset finance areas

If there is one significant trend that’s ‘ sticking ‘it’s Asset Based Finance. The ability of firms to obtain funding via assets such as accounts receivable, inventory and fixed assets with no major emphasis on balance sheet structure and profits and cash flow ( those three elements drive bank financing approval in no small measure ) is the key to success in ABL ( Asset Based Lending ).

Factoring, aka ‘ Receivable Finance ‘ is the other huge driver in trade finance in Canada. In some cases, it’s the only way for firms to be able to sell and finance clients in other geographies/countries.

The rise of ‘ online finance ‘ also can’t be diminished. Whether it’s accessing ‘ crowdfunding’ or sourcing working capital term loans, the technological pace continues at what seems a feverish pace. One only has to read a business daily such as the Globe & Mail or Financial Post to understand the challenge of small business accessing business capital.

Business owners/financial mgrs often find their company at a ‘ turning point ‘ in their history – that time when financing is needed or opportunities and risks can’t be taken. While putting or getting new equity in the business is often impossible, the reality is that the majority of businesses with SME commercial finance needs aren’t, shall we say, ‘ suited’ to this type of funding and capital raising. Business loan interest rates vary with non-traditional financing but offer more flexibility and ease of access to capital.

We’re also the first to remind clients that they should not forget govt solutions in business capital. Two of the best programs are the GovernmentSmall Business Loan Canada (maximum availability = $ 1,000,000.00) as well as the SR&ED program which allows business owners to recapture R&D capital costs. Sred credits can also be financed once they are filed.

Those latter two finance alternatives are often very well suited to business start up loans. We should not forget that asset finance, often called ‘ ABL ‘ by those Bay Street guys, can even be used as a loan to buy a business.

If you’re looking to get the right balance of liquidity and risk coupled with the flexibility to grow your business seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success who can assist you with your funding needs.