Three Alternative Lending Programs that Help Today’s Businesses

Three Alternative Lending Programs that Help Today’s Businesses

Today’s small businesses and mid-size businesses are challenged in obtaining new traditional business credit. There is nothing wrong with taking your business out of traditional lending and into alternative business lending.  In some cases, with alternative business lending, you can obtain your new capital within less than a week. Selecting alternative business lending was probably due to not having the adequate credit scores your local bank requires. Before you decide to finance your business, check your credit with Equifax, Experian or MyFICO.

When shopping for an alternative business loan, keep in mind, if you cannot afford the daily ACH, don’t sign for the loan. We had clients who did not understand the terms and conditions of an alternative business loan that could not afford the loan from the get go. Always opt out of any prepayment penalties and understand how much your alternative business loan will cost you at the end of the term.

MicroLoans

A Micro Business Loan starts at $25,000 to $200,000; they are much simpler and better than a merchant cash advance loan.  A merchant cash advance requires your business to change your merchant processor besides getting charged a penalty if you cancel your processor. There are no hidden costs in a business microloan and the loan is renewable prior to the maturity date, which means it can help your business with your net cash flow, expansion, business remodeling, and new business equipment. The turn time for approving a microloan is typically two business days.  

Example: A recent client was offered a merchant cash advance loan; he was frustrated and uncomfortable with the terms, conditions and penalty rider. He called an inquired if there were better options for acquiring capital for his business remodel, the answer was yes, and we offered him a small business microloan because it is much easier to hold than a merchant cash advance. Today, the client has funds to complete his remodel besides having the option to renew his loan half way through its maturity date.

Factoring Loan

Believe it or not a Factoring Loan is one of the most traditional methods to raise capital for your business.  Basically your company will be selling your account receivable at a discount of its face value.  The lender buys your invoices which you want to advance until your customer finally pays you. If your company is cash strapped, this would be a perfect fit. The lender will qualify your ability to pay by your company’s aging accounts receivable report and creditworthy customers.

Example:  A carpet store has an invoice with a public library, the amount of the invoice is $80,000, and your contract does not allow your company to get paid until later. Your company doesn’t have a traditional business line of credit that will help you cash flow. So now what? Call an expert that specializes in alternative business lending who will be able to sell your invoice at a discounted percentage until you fund. The remaining percentage of the invoice less the lender fees will be returned back to your business by the lender, the lender will not keep the additional percentage of the remainder 100% face value of the invoice. Remember, there are no upfront fees to refer you to one of our business lenders.

Purchase Order Financing

Purchase Order Financing is another alternative business loan. Purchase order financing is a solution for companies whose growth is pacing faster than capital; it is an edge to fulfill your sales orders to your customers.

Example: A wine distributer received a purchase order from Costco; the company does not have enough capital to fulfill the order with its suppliers. The wine company does have a line of credit with a traditional bank; however, the bank will not allow more credit for the wine distributer. The wine distributer goes outside the traditional lending box and opts into purchase order financing and fulfills the purchase order with Costco.

Please keep in mind your personal credit and business credit score are also factors in obtaining an alternative business loan.  If your personal credit scores and business credit score are bruised, give us a call and receive a free thorough consultation. We will successfully help you and your company get on the right track with personal credit repair and business credit repair.

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For more information on how you can obtain your Microloan and alternative business loan locally in Jupiter FL, please fill out the online contact form about your concerns or give us a call at 855.477.9007. Read what our valued clients have to say about First Pro Capital on our Testimonials page.

 

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