Available Business Funding Sources

download (7)There are many sources who offer business funding today. Knowing the different sources will help you find the best funding options for your business.

Remember, most of these funding sources you can access right through your funding suite with us. So reach out to me to receive more information about the specific funding that will work for you and your business.

In the meantime take a look at some of the many sources of funding that are available today.

Business Charge and Credit Cards are a fast and easy way to access cash for business. You can use the money for any purpose, and you can be approved for business credit with no personal guaranty or credit check. Many merchants will approve you for individual credit cards of $10,000 or higher.

Angel investors have been responsible for funding over 30,000 small businesses each and every year. With over 250,000 active angels in the country you may want to consider an angel investor network to simplify your search. These investors are a great source of funding when banks won’t approve you, and perfect for projects where you need a lot of money.

Asset Based Funding is perfect if your company has collateral such as accounts receivable, inventory, equipment, purchase orders, or real estate. These assets can be used to secure the financing you need, and you can secure asset based funding even if your credit isn’t very good.

Bank Loans are still available, although they have become harder to get approved for. Many large banks tend to be much more conservative in lending so you may want to consider a community bank or credit union for a small business loan.
Equipment Leasing helps when you want to lease expensive equipment, and some equipment leasing and financing also works for you to borrower against existing equipment you already own.

Factoring is perfect if you have high amounts of account receivables. You can obtain funding up to 25 million and you can receive your advance within 24-48 hours in most cases. With factoring, you sell your company’s accounts receivables to a company (known as a factor) at a discount, in order to free up your cash. The company that purchases the receivables then assumes the responsibility for collecting them. This is a great option as they absolutely don’t care about your own personal credit.

Grants are a great way to get money for your business, especially government grants. Depending on your business types and intended use of funds, there are many options available for you to receive grant money that doesn’t need to be paid back.

Lines of Credit are perfect sources of working capital. A line of credit works like a revolving credit card but with much lower interest rates and higher available credit limits. You can get credit lines over $150,000 and write checks from the account or use a debit card to withdrawal funds or use for purchases.

Merchant Cash Advances and Merchant Lines of Credit are perfect for businesses who process credit card payments. This type of financing will advance you money against future credit card transactions. You can even get a debit card to use the funds you secure.

Microfinance Loans are less difficult and time intensive to qualify for with loan amounts ranging from $500 to $35k. Many businesses use several micro loans to get money for their business versus applying for one larger loan due to the easier qualifying criteria.

SBA backed Loans are still one of the most popular financing options available today. SBA backs, or insures about 80% of the loan while the lender lending the money takes on about 20% or so of the risk. Due to the lower risk to the bank, many major banks are more apt to lend money using SBA backed loans than regular loans.

Venture capital is neither easy nor fast to be able to tap into but can be a viable source of funding. This is a great source when you need higher loan amounts, and don’t mind giving up a potential stake in your company. Plus you don’t have some of the headaches that come with conventional funding.

 

Account Receivables Financing

download (6)Receivables financing or “invoice factoring” is a great way to get money for your business.

Accounts receivable financing is not a loan; it’s an advance against your client invoices.

You are selling your outstanding invoices to a factoring company who then gives you back up to 95% of the invoice value in the form of a loan against those invoices.

Receivable Financing is mainly used to generate immediate cash flow for the business selling the accounts receivable.

These are a great funding option as they provide an immediate advance of cash to you leveraging your outstanding invoices.

This means as your business grows so does the amount of funding you will qualify for so you can meet increasing demand.

Most major companies including most major Fortune 500 companies utilize some form of Accounts Receivable Financing.

One of the best benefits of receivable financing is giving your business an increase in working capital without needing to borrow money or tie up your business or personal assets.

This boost to your cash flow positively impacts your profitability.

You can receive money quickly, typically within 24 hours from approval. This is much faster than if you were trying to collect on the invoices on your own and wait for that money.

Prior to purchasing your invoices, a factor conducts a credit analysis on the client you are invoicing to determine their risk or repaying the invoice.

You are entitled to the resulting analysis which is a huge benefit as it can assist you in your future business dealings with that client.

Another big benefit of Receivable Financing is that you are not obtaining a loan. The cash advanced is based on your client’s credit status, not yours making it easier to qualify for.

You may qualify for factoring even if you are a new company without an established track record, have a tax lien, or even declared bankruptcy.

This is not considered a loan since you are literally selling your own receivables. And you can be approved for as much as 25 million dollars in financing.

Accounts Receivable Financing really boosts your cash flow by providing an immediate advance of cash into your business against the value of your outstanding invoices.

SBA 7(a) Loans – Small Business 7(a) loans are well known and loved in the business community.

If you are awarded a 7(a) loan, the loan proceeds may be used to establish a new business or to assist in the acquisition, operation, or expansion of an existing business.

Directly from the SBA, here are some of the uses for loan proceeds:

• The purchase land or buildings, to cover new construction as well as expansion or conversion of existing facilities
• The purchase of equipment, machinery, furniture, fixtures, supplies, or materials
• Long-term working capital, including the payment of accounts payable and/or the purchase of inventory
• Short-term working capital needs, including seasonal financing, contract performance, construction financing and export production
• Financing against existing inventory and receivables
• The refinancing of existing business indebtedness that is not already structured with reasonable terms and conditions
• To purchase an existing business