There are a great many possibilities for securing funding for small businesses through alternative financing, and if you haven’t been aware of these up to now, it may be worth your while to familiarize with some of them. Whenever you have an issue with cash flow, or you would like to secure additional funding for working capital, it’s very possible you can get the funding you need through alternative financing.
Merchant cash advances
In a merchant cash advance, your business could receive an upfront lump sum of cash in exchange for a percentage of your future credit card transactions. In some cases, this is paid back on a daily basis as credit card sales come in, and in other cases, a simple subtraction is made daily from an established business merchant account.
Accounts receivable factoring
This arrangement calls for a factoring company to purchase some or all of the accounts receivable invoices from a business, in exchange for a percentage of the face value of those invoices.
This is an arrangement similar to a merchant cash advance, in that the business owner receives an upfront lump sum cash amount. However, the alternative lender is repaid on a monthly basis, and the cash advance is not strictly tied to credit card sales, but to the business’s entire revenue stream.
Purchase order financing
This alternative financing arrangement provides your business with the funds needed to pay suppliers, so that you can get materials needed to build an unusually large order for a customer. Once the customer pays for the finished goods, the lender is repaid for the funding, along with a service fee.
In this kind of arrangement, a property owner or equipment owner sells the asset to a lender, and then leases it back, so that it can be put to use in the normal conduct of business. The original owner thus retains usage of the asset, while the financing company has technical ownership.
GrowthCC should be your alternative lender
To find out about the many options available to your business through alternative financing, contact us at GrowthCC today, and let us tailor a solution for your business needs. Contact us today, so you don’t lose another day to the competition!