Blog Information

• BLOG_POSTED_BY: Richard Moody
• BLOG_POSTED_ON: Nov 29, 2017
• Views : 803
• Category : Business
• Description : While bank loans are viable financing options in many instances, they are not always the best way to go. There are alternatives that the business owner should consider closely. Depending on what the purpose of the financing happens to be and the potential that the company has to grow, one of those alternatives may be a better fit. Here are a few other financing methods to consider closely.

Overview

• While bank loans are viable financing options in many instances, they are not always the best way to go. There are alternatives that the business owner should consider closely. Depending on what the purpose of the financing happens to be and the potential that the company has to grow, one of those alternatives may be a better fit. Here are a few other financing methods to consider closely. Getting an Advance Based on Credit Card ReceiptsNot every business owner is aware that merchant account providers may be willing to provide a loan based on the average amount of credit card payments processed each calendar month. The beauty of this approach is that the debtor does not have to make payments on the loan balance. As the provider processes each credit card payment, a percentage is retained and applied to the current loan balance. After subtracting that percentage plus the typical processing charges, the money remaining is transferred to the debtor’s bank account. While this approach does mean that less cash flow ends up in the bank account, it also means obtaining financing without having to go through the standard evaluation required by most banks. When there’s the need to cash now instead of next week, bad credit loans make a lot of sense. Using Purchase Orders for FundingThere are lenders who will provide loans based on standing purchase orders. If the applicant has agreements in place with customers that call for delivery and billing of volume purchases each month as outlined in those purchase orders, that information can serve as the basis for advancing a limited amount of funds. Keep in mind some lenders will require that customer payments be remitted to addresses that the lenders provide.Factoring InvoicesFactoring involves working with a partner who is willing to purchase a batch of invoices and provide a lump sum payment that amounts to as much as 90% of the total value. In return, the remittance address used for the invoices directs all customer payments to the lender. After the lump sum payment is repaid in full using those payments, additional funds are released to the client, less the agreed upon percentage that serves as payment for the factoring. With this approach, business owners have the cash on hand to cover standard business expenses or to use for revenue generating projects. There are a couple of potential drawbacks to consider. One is the fact that the partner decides when more of the collected revenue will be made available to the debtor. Another is that the partner assumes the responsibility for handling the collection process for past due invoices. When those collection policies are not in line with the approach used by the debtor, there is the potential for losing a client and experiencing a decrease in generated revenue.Contact Smarter.loans today and learn more about Calgary bad credit loans that can take the place of bank financing alternatives. One of those solutions may be ideal for meeting the company’s current needs.