Sooner or later every business will need financing to be able to survive and grow to the next level. This is true for every company, regardless of size. If you are a business owner and you need money,...
Sooner or later every business will need financing to be able to survive and grow to the next level. This is true for every company, regardless of size. If you are a business owner and you need money, your first stop is likely to be your bank.
Banks offer a number of financial products, but business owners generally try to get business loans or lines of credit. While both can help you grow your business, they are also very hard to qualify for. Banks usually require that the business have significant assets, collateral and 3 years of audited financial statements.
What if you don’t meet these tough criteria? Are there any alternatives?
There are two financial products that may be able to help you significantly. Let’s look at two statements:
a) I have a lot of money tied up in slow paying invoices - and/or -
b) I have a big purchase order and cannot afford to pay my suppliers
If you can answer yes to either of these statements, you can benefit from either factoring or purchase order financing. Both are great alternatives to bank loans.
Factoring provides you with financing based solely on your slow paying invoices. The financing is determined by your invoicing. If your invoicing grows, so does your financing.
Purchase order financing is ideal for distributors, wholesalers and resellers who work with large purchase orders but cannot afford to pay their suppliers. The purchase order financing company pays your suppliers and helps you deliver the sales. They get paid once the end client pays the invoice for the delivered products.
Both invoice factoring and purchase order financing are easy to qualify for and available to businesses regardless of size. They are ideal products for businesses that are growing.
