| Investopedia: "Transaction is an agreement between a buyer and a seller for the exchange of goods or services for payment. The parties participating in a transaction have an obligation to perform their part. For example, for two parties involved in a futures contract, the seller is obligated to sell and deliver the underlying asset and the buyer is contractually obligated to pay the agreed upon price and accept the delivery." (credit: investopedia.com) |
Transaction finance or transactional financing permits the entrepreneur to spend more time on marketing, sales and manufacturing, rather than worrying about raising additional capital to finance growth. With each new transaction, STAR builds a closer understanding of the client's business. This builds confidence and leads to a strong relationship between the client and STAR. The entrepreneur in effect borrows STAR'S capital to grow the business, rather than add new investors. Hence the entrepreneur retains control of the company.
STAR requires that its client be in a pre-sold environment to fund a transaction. Therefore, unsold inventory does not qualify for transactional financing. STAR permits companies to bid for larger contracts because it provides up to 100% funding for a transaction. STAR literally designs a program to meet the specific needs of its clients.
STAR is prepared to work with other lenders and factors to maximize a client's access to credit, provided the client is in a pre-sold position. In such cases STAR, with the agreement of the existing lender, takes a purchase money security interest in the assets it finances. STAR will finance the purchase order and inventory portion of the transaction.
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