Do you have a new or a grow business? If you answer yes, it means sooner or later you will need a business financing. Of course, if you’re like most entrepreneurs, you first inclination may be to search a business loan. Unfortunately, the business loans can be so very difficult to get, it takes weeks to set up and does not fit well with most companies. You can do better to search for alternative business financing products.
I will discuss two alternative business financing products. As opposed to traditional business loan, they are very easy to obtain, can be agreed within a few days, and they will grow as your business grows.
Invoice Factoring
If your greatest business financing challenge is that you have a client that take at least 60 days to pay their bills, then the sollution is to factor your invoice. Factoring or invoice factoring as it is often called, will accelerate the payment of your customers and get you paid within 2 days. Factoring does not involve any changes in your customers’ paying habits, but rather, the financing your slow paying bills through a factoring company. By factoring, you can capitalize your invoices and get the funds you need to meet the payroll and pay suppliers.
Purchase Order Financing
If you are a retailer or wholesaler and your biggest challenge is that you can not afford to pay your suppliers, then the purchase order financing is the best way for you. The purchase order financing provide the necessary funds to pay your supplier (usually by a letter of credit). This allows you to buy goods in order to fulfill your order and make the sale.
Both purchase order financing and invoice factoring can be obtain from a factoring company (not banks). Both solutions are extremely affordable, but they work best when the business make profit margins of 15% or more.
So if you have a business that need financing, be sure to search at these non-traditional business of financing tools.