Getting a small business loan from a bank remains a difficult feat in this still-recovering economic environment. According to the New York Times, today’s banks are cautious requiring a lengthy list of requirements before they will loan you money. Need the money soon? Banks are taking longer than ever to decide on loans for small business. It is more common, in fact, to spend hours and hours applying for a business loan only to learn – several weeks later – that you are denied for any multitude of reasons.
Factoring For Small Business Wants to Say “Yes”
Some rationale for business loan rejection might include: not having a high enough credit score, not being in business long enough, or not having enough month-to-month revenue. Small business loans generally require you to put down collateral in the form of property or assets, and if you are just starting out this could be hard to come by. You might be asked to put down your own house for collateral.
Small businesses, especially startups, will likely struggle meet these credentials. Personal character and reputation used to mean something years ago when a person was seeking a loan. In those days a banker might overlook certain areas where credentials were lacking because he believed in your business plan and your ability to execute it. However, in today’s tough banking atmosphere, this happens far less often.
Small Business Factoring Companies Can Help Imperfect Businesses with Financing
Small business invoice factoring, on the other hand, does not have such stringent requirements. Some factoring invoice companies will provide factoring services for as little as $5000, others for as little as $2000 if that’s all that you need. Yet these same factoring companies can offer a line of credit of up to $10 million for startups or rapid growth small businesses.
Moreover, small business factoring invoice relies on the credit standing of your clients rather than your own business. So if your customers pay their bills on time, then you are likely a good candidate for factoring. Your current and recent invoices serve as your assets so no additional collateral, such as putting down your house or office building, is necessary.