cash flow potential?

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Posted by David on March 11, 2004 at 10:08:38:'s a note situation that's real estate related and may be a great opportunity,...could use feedback from you note hounds regarding the potential for cash flow business.

Situation: family business does home improvement type service. do 12 months same as cash financing, then sells paper at discount to Wells fargo. As I am exploring the cash flow industry, I'm thinking "hey, there may be an opportnity here!" I can have the business if I want it. They do several million a year. I don't think discount is high (5%) but yield can be bumped through early payoffs etc,. (note enhancements?). Plus, after 12 months, rate jumps to 18%. Is this the proverbial low hanging fruit to be grabbed?

May be just a factoring operation, waiting to find out. Waiting for details on collateral etc. But thinking that where there's cash flow, there's a way?!!



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