Article: Financing An Existing Company without Business Loans
This has to be one of the toughest times to get any type of business financing in recent history. Although the credit markets are improving and some institutions are starting to lend money, few startups are getting loans as institutions prefer to focus on businesses that have a track record. But even existing companies are having a hard time obtaining business financing. For the most part, institutions will ask for two years worth of financial records, including tax returns. And unless your business can show profitability and excellent growth prospects, chances are that your business loan may get delayed or denied. And if your records show any blemishes - your chances of getting a small business loan will be very low. Basically, institutions are only making business loans to their most promising prospects. But that leaves many businesses that have good potential out of the picture. Fortunately, there are some alternatives.
If your company sells to commercial to government clients, you are probably familiar with having to sell on terms or net 30 days. Basically, it means that you deliver your product or service today but have to wait 30 to 60 days to get paid for it. In the meantime, you still have to cover operating expenses and must continue to pay suppliers and employees until you get paid. This creates a problem for many companies for two reasons. Few companies have enough capital to wait two months to get paid. But more importantly, many companies are rejecting large orders or projects simply because they can't afford to pay everyone else while waiting to get paid. One solutions to this problem is to use invoice financing.
Invoice financing provides a simple approach to financing your business. It eliminates waiting 30 to 60 days to get paid by providing you with an advance against your invoice. This provides you with capital to operate your business, while you wait for your customer to pay. Once your customer pays, the transaction is settled. As opposed to conventional business loans, invoice financing programs can be approved quickly and put in place in days. Invoice financing is also dynamic since your funding grows as your sales grow. This makes is an ideal solution for certain types of businesses.
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