Accounting Best Practices, Fifth Edition

11–2. Obtain Financing through Internet Lender Sites

Obtaining financing can be a slow and laborious process for the chief financial officer. In particular, he or she must fill out the same lending applications for each lender contacted—the information provided is almost the same for each lender, but each one has a different form that must be completed in order to process an application. Also, if a company’s needs are quite specialized, it may require an extensive search through dozens of lenders to find one willing to extend funds. In addition, the accounting staff must retain a voluminous file of lending documents for each loan outstanding, which can be a considerable amount if there are a multitude of leases and loans.

These problems can be avoided by shifting a company’s lending activities to an Internet-based lending site, such as www.capital.com or www.captara.com. These sites have established electronic links to several hundred lenders, to which the company can send its lending application. By having access to so many lenders, the CFO has an excellent chance of making contact with a qualified lender in short order. Also, because the Web site requires one to complete only a single standardized borrower application, the request for proposals effort is vastly reduced—many CFOs feel that this is the primary reason to use an Internet-based lending site. Further, some sites address more complex financing needs, such as the funding required for rollups, turnarounds, management ...