Working with lenders comes with restrictions. Many traditional lenders are unwavering and unable to accommodate the personal and business needs necessary to sustain growth. Consider alternative financing opportunities when weighing your lending options. Here are a few areas worth exploring.
Payroll Finance: Payroll Financing is an option that does not take out a loan or put a small business in debt. Instead, this avenue allows business owners to borrow against future income from a projected project. It works by selling approved invoices to a lending company at a discounted rate. As a result, business owners can proceed with a scheduled payroll without accumulating debt.
Accounts Receivable Financing (Factoring): Factoring, previously much mis-maligned, is now being recognized as one the most flexible financing alternatives for those companies that are unable to get or get enough financing through traditional sources, banks, SBA, etc. Even the SBA now recognizes factoring as a valuable alternative tool. Factoring is simply where the bank or non-bank factor purchases invoices by discounting them 1%-3%, and immediately advancing 70%-90% of the invoice face amount. The amount outstanding on that invoice is reduced when payment is received and the 10% less fees is returned to the company. The are several other advantages that Factoring has over other types of financing.
Asset Based Lending: Asset based lending options is a loan taken out that is secured by the value of an asset. However, if not paid in full, the asset is taken by the lender. Like with many mortgages, lenders will front money with an asset as collateral. It is important to note, in many instances, asset lending loans are usually accompanied with lower interest rates.
Purchase Order Financing: In many businesses, money is needed upfront to fill a purchase. However, there are times when the funding for the project is not available. Purchase Order Financing allows you to take a loan on the supplies needed to complete an order, and in turn, the lender seeks out payment directly from the client.
Equipment Financing: Equipment matters to the function of a business as well as to its branding. Before using your working capital or tapping into your business line credit, consider Equipment Financing as an avenue to gain necessary workforce equipment without running into debt. Many equipment financing and leasing options are built with structure and can be worked into your company’s budget taking into consideration business, accounting tax specifications.
SBA Loans: SBA loans are backed and guaranteed by the Small Business Administration. Small businesses are eligible, which is offered through private-sector lenders with reasonable terms. Small business owners carry a unique set of challenges when it comes to lending options. The traditional financing avenues granted to many corporations are void in the private-sector workforce. Consider alternative financing options to help prevent debt and heighten growth.
For more information on financing options or about the services provided by: Empire Global Advisory Services, LLC
Milton H. Barbarosh, CPA/ABV, MBA, ASA, CGMA
Empire Global Financial Services, LLC
(Business & Real Estate Brokers)
265 S. Federal Hwy, #252
Deerfield Beach, FL