One of the biggest complaints that business people make is trying to keep their cash flow even. When customers use credit, business owners have to wait for their payments in order to free up more cash for important purchases, expansions and other business decisions. Traditional ways to get around cash blocks and cash shortages include revolving credit or bank issued credit lines that allow a business person to draw on the line for various reasons. Today, there are new financing methods, such as the process of invoice factoring, that allow you to gain funding for your business.
1. New funding comparable to bank rates
Funding invoices through online borrowing systems, often at a comparable interest rate as banks can help ease cash flow challenges. Many of the online services are easier to apply to, and do not charge interest or penalties with early payoff. Some of the systems provide very short timelines—when all a business person needs is a few weeks of funding—and the borrower can pay off the loan when they want.
2. Easier application processes get money to borrowers fast
Some bank applications can take weeks and even months to set in place. When a payroll is due in a few weeks, though, and a business has its cash tied up in some major capital purchase or other inventory, online funding can provide a stop-gap measure that gets money to the borrower quickly. This method has a simple application process that is often much faster than traditional borrowing methods.
3. How much funding is available
Funding amounts vary, but larger sums are available. Like any borrowing situation, how much a business or borrower can receive is dependent upon their credit history. Once a borrower has established a history with an online lender, their ability to borrow can quickly improve. Amounts over $100,000 are not out of the question. Again, like any lending agency, online services may require credit reviews and other documentation to ensure that the borrower is credible and a good credit risk.
4. What can funding be used to do
Funding can be used for a wide range of possibilities, whether your business is expanding, a major capital expenditure needs to be made, a payroll needs to be met or other financial issues are happening when cash flow might not be available to meet the demand. Online funding can step in to cover that short time frame between receiving the invoice from the client and when you have to meet some other credit demand.
5. How can online funding be so quick and affordable
Online funding operates via online services, cutting costs dramatically by by-passing traditional buildings and physical locations. That makes their reach much more significant, too, as they can loan around the world, increasing their own customer base, and so allowing them to loan at very reasonable rates.
6. Online stop-gap funders a great start-up alternative
When a business is new, small or in a growth spurt, online lenders can provide a great way for short term funding. Their terms are comparable to traditional lenders, and in some ways—such as waiving fees on early payoff and no penalty for early payment—are an even better choice. Check it out today.
