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Re: The AR TRE thingy

By: Cactus Flower in ALEA | Recommend this post (0)
Tue, 14 Aug 12 12:17 AM | 78 view(s)
Boardmark this board | The Trust Matrix 		Msg. 09327 of 54959
(This msg. is a reply to 09325 by DigSpace)
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This is called invoice discounting in the UK. Basically you get an advance against invoiced sales. You pay interest and charges on the outstanding balance at any point in time.

So essentially it's a kind of loan using billings as collateral. The total throughput is fairly unimportant except in calculating interest etc. What matters is the balance.

Ultimately, it's not so dissimilar to an overdraft facility. Just a different kind of collateral.

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The above is a reply to the following message:
The AR TRE thingy
By: DigSpace in ALEA
Mon, 13 Aug 12 11:43 PM 		Msg. 09325 of 54959

Lets see if I got this right.

Wave is essentially taking paycheck loans ... Wave expects to get some money from Dell (AR), they get a loan against it, they buy the AR back (pay off the loan) and so on. A revolving AR LOC.

So far they have moved some 4.m that way at which at the end of the quarter they had a balance of .8-1.0m on their AR-LOC.

Correct?

The facility is good for 1m, and their end of Q balance was .8? Or is it that they got .8m that is collateralized by 1m in AR. Can they go 2m, 4m, 6m of collateralized AR (assuming they had such an amount of AR?)

I mean this could carry them through assuming they bag a deal of 5 for a couple mill or 5?

The only thing that is certain is Wave clearly exudes being under the firm steady hand of capable management.


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