Do you need capital to keep your business running or to implement new growth initiatives? Well, just drive down to your local bank. Wait ... banks still do not lend to small businesses.
But banks may not be your only option.
For decades, there have been many funding programs, some behind banks, but most not focusing on asset based lending or focusing on company strength not just business owners meaning your credit does not need to score points in the stratosphere.
Asset based lending mainly uses a companys financial asset to hedge a loan or advance for working capital, general operating expenses or even capital injections.
This type of financing is more focused on the generated business asset and how easily or safely the asset can be converted into actual money.
Trade receivables: If your company generates customer invoices, there are financial companies where you buy your receivables, advancing your company up to 90% of the invoice amount, collecting money from your customers saving time and hassle. and then refund the difference back to your business.
These companies do not borrow based on your credit or company balance sheet but focus mostly on your customers payment support.
Purchase Order Financing: Does your business have customer orders in hand but not working capital to complete or fulfill these orders? There are financial companies that will provide capital contributions based on these unfinished orders. called purchase order financing.
These purchasing finance companies will advance your business, based on the number of order orders, to complete the job or order. This means having the capital needed to purchase inventory and supplies or even hire additional labor.
Whatever your needs, purchase order financing is a great way to use or utilize already acquired business to get the capital your business needs to grow and succeed.
Business Cash Advance: Many companies, just by their nature as service organizations or retailers, do not generate financial assets for companies such as those mentioned above. However, there are still ways that they can acquire the required working capital to grow their business or to face immediate expenses. If your company accepts credit cards as payment from your customers, there is a finance company that will dispose of your company capital against and get it your FUTURE credit card receipt.
The benefits include receiving the required working capital today that can be used for all business needs or personal needs, enabling companies to generate future income, low demands on repayment based on a small percentage of your future sales small enough not to hurt Your companys future cash flow needs and these financing companies are more interested in your future sales ability the strength of your business than your credit history.
The downside is that some of these products, while trying to be very competitive, can be a little more expensive than traditional loan products. But keep in mind that if you have no other option and believe in what you and your company can do with the extra capital, then the potential benefits exceed significantly higher costs.
In business, especially for companies that start up companies or companies that do not yet meet traditional long term arrears, it can be a daunting task to access money for growth or expansion or even just to meet current obligations. But instead of being intimidated by this process, let the entrepreneurial spirit kick in. Get creative and find ways to make these sources for capital work for you thats what drives a business is about.
Furthermore, with our current credit crunch non lending banks, these types of financing options can be your companys only option in the future regardless of stage or time of business.
Finally, while the goal of all companies is to obtain a need for corporate loans from traditional banking institutions its typical as validation for all your hard work when your bank approves your business for a loan its not always convenient to do it the banks are very selective. But using these and other types of alternative financing options, many entrepreneurs can find that they can avail these capital sources to grow their business to a point as they become creditworthy in their financial institutions Ironically, this is when this point usually comes to the current business no longer need bank financing.