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Alternative Financing and Invoice Factoring

Since the banking and economic flop of 2008, lending by traditional banks has dropped considerably for small business loans according to USA Today. Coinciding with that trend, various forms of alternative lending has increased as businesses that get denied for term loans seek other sources of funding.

Yet there remains a lot of confusion out there over these various alternative financing methods simply because business owners and managers don’t know a lot about what these different options are and how they work. Going back 10 o 15 años, there was some truth that alternative financing such as merchant cash advances or accounts receivable factoring were outside the mainstream. Other financing options served certain industries such as freight factoring and manufacturing factoring.Alternative Financing & Invoice Factoring

Hoy, a Number of Businesses Use Factoring Services

Alternative financing such as factoring receivables has become more mainstream as more companies use them each year. Traditional loans for small business will look at your credit score, years in business, tax returns, annual revenue and more before offering you a term loan. You will have to put down assets, properties, equipment or other collateral to secure the loan as well as closely adhere to the contractual obligations to pay the loan back plus a percentage over a certain period of time.

Invoice Factoring Is All About Getting Creative with Collateral

Alternative financing options may or may not require collateral. Asset based financing and inventory funding, por ejemplo, do use collateral but it is used differently than in a traditional small business loan. Aunque alternative financing can sometimes cost more, this is because there is a greater threshold for risk and you are paying to absorb some of that.

Another key for alternative financing is expediency, and part of what you are paying for is getting your money fast. It is common knowledge to say that banks generally do not provide you with the cash you are seeking in 24-48 horas. This is, sin embargo, very possible with alternative lending or invoice factoring.

Don’t Qualify for a Small Business Loan? Join the Club

Confused as being a loan, factoring receivables is an alternative financing method where you can sell your current invoices to a third-party factorización de facturas company to get cash quickly rather than wait the usual 30-day payment period to get paid. The factoring company then collects payment from your client and you pay a percentage or fee for the expedited process. Along the lines of short term loans, merchant cash advances, inventory financing and others, factoring accounts receivables is an alternative financing method more and more companies are using to move forward when traditional banks say no.

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Sobre el Autor:

Robert Bernfeld se inició en el sector financiero comercial en 1974. Sus primeros años incluyen posiciones con Aetna crédito del negocio y el Grupo Foothill. Durante los próximos treinta y cinco años. Señor. Bernfeld establece tanto el arrendamiento de equipos y cuentas por cobrar empresas de factoraje. Se asoció en la fundación de facilitadores comerciales, Cía. en 1999. Sr. Bernfeld se graduó de la Universidad de California, Riverside en 1974 y recibió el grado de Doctor en Jurisprudencia de la Facultad de Derecho de la Universidad de Loyola en 1977.

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