OVERVIEW OF THE CASH FLOW INDUSTRY.

   The cash flow industry is a marketplace where businesses and individuals get help managing their cash flow needs. The cash flow industry is all about getting cash into people's hands when they need or want it. One primary way the industry solves cash flow needs is buying, selling, and brokering income streams that are owed in the future.

   An income stream is simply how cash flow professionals refer to a future payment or series of payments. *Below, you will find the different types of income streams there is that I can be of help. Essentially, an income stream is a financial obligation or debt that one party owes to another party. The financial obligation is generally reduced to writing in a legal document. While it is the payments that make up the income stream being bought and sold, they are frequently referred to by the legal document that evidences the payment due. The legal document would also be the debt instrument or cash flow instrument.

   Most of the income streams that are bought, sold, and brokered in the cash flow industry are privately held. Privately held means the income stream is owed to a private individual or business rather than to a bank or other financial institution.

   Suppose, for example, you sold your home to your daughter and provided the financing yourself. Now your daughter writes a monthly check for her mortgage payment directly to you rather than to a bank.

   In that case, your daughter's payments create an income stream for you. That income stream is privately held, because you are a private individual, not a bank or mortgage company.

THE SECONDARY MARKET. (continue)

   Privately held income streams, like the one created by your daughter's payments in the example above, can be bought, sold, and brokered in a special marketplace called the secondary market. In the secondary market, individuals and businesses can get cash for income streams that are owed to them in the future.

   Let's go back to the previous example. Suppose now that instead of receiving monthly mortgage payments from your daughter, you would rather have a lump sum of cash in order to buy another home.

   Could you get cash in exchange for your daughter's future payments at your local bank? Probably not. However, you could get cash for this income stream in the secondary market with the help from a certified cash flow consultant. Many willing investors would give you cash today in exchange for the right to collect those payments over time.

   Let's look at another example. Suppose you own a marketing specialties business. You manufacture pens, paperweights, and other gadgets with company logos on them. You have delivered $20,000 worth of merchandise to a customer, along with an invoice requesting payment within 30 days. Although the customer owes you money within 30 days, that money is not yet available to pay your bills.

   Now, suppose a third party offered to give you $19,000 in cash today in exchange for your $20,000 invoice. Would you accept the offer? You certainly would if you needed cash today in order to pay your employees and buy supplies for new orders. It would make it possible for you to stay in business and keep your customers happy.

   Transactions like this one occur everyday in the United States and abroad. Individuals and businesses collect future payments or income streams sooner, rather than later, by selling them to a third party. The third party pays cash today for the right to receive payments overtime.

   Who are these third parties that purchase income streams? They are called funding sources. A funding source can be either an individual investor or an investment company. Either way, a funding source is a third party that is willing to pay cash today for the right to receive payments over time. In exchange for giving up its cash, they earn a rate of return on its money.

   Just about any income stream, whether it is a mortgage to be paid over 20 years or an invoice to be paid in 30 days can be sold to a funding source in the cash flow industry. When this happens, it is called a cash flow transaction. A transaction occurs whenever a funding source pays cash to an individual or business in exchange for an income stream.