RE: Finance & Leasing

>
>Are there finance companies who will bill customers for a project while
>paying us up front?  I used to have one when I sold computer hardware, but
>that company will not underwrite web or software development.

These are essentially accounts receivable financing arrangements (called
"factoring" in the off line business world) if it is set up whereby the
developer assigns the client contract to the lender.  In such event, the
developer must be aware that the *developer* is primarily borrowing against
the receivable and if the deal between the developer and the client goes
sour, it is the *developer* that is the party liable to the lender.

On the other hand, the client can make its own deal with a lender pledging
the web site, the intellectual property rights etc. including any ecommerce
or other revenue as collateral.  

In either instance, the party should be prepared to pay a higher rate of
interest because of the speculative nature of the transaction.  And in
either instance, there must be an appropriate contract involved since there
is a third party and there is a need for appropriate UCC forms as well.


IVAN HOFFMAN, B.A., J.D. 
Attorney At Law
Lawyering With Integrity (sm)
Internet Law, Copyrights, Trademarks, Writing and Publishing Law, Web
Design Contracts and Law, Business Plans, Web Site Audits, Recording and
Music Law.  *A 5 Times Award-Winning Site.* http://www.ivanhoffman.com

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