Have you ever tried to secure a bank loan for a business? If so, you know how much of a hassle the approval process can be. The hoops you’re forced to jump through are invasive and take forever. Not only that, after you’ve gone through this long, drawn-out process, your request for a loan could still be denied. That’s why thousands of small businesses are turning to easier, quicker, and effective funding alternatives. If you’re interested in avoiding the hassle of a bank loan and saving precious time, check out these four safe alternatives to a bank loan.
If you’re working in a service business with invoices, such as a trucking company, invoice factoring is the perfect solution to getting your hard earned cash faster.
How it Works: Invoice factoring isn’t a loan, so there’s no need to worry about paying back a lender. With invoice factoring, you send your client invoices to the factoring company who pays you in advance (minus a few percentage points). You get money in your pocket faster AND you don’t have to worry about invoice tracking for jobs with 30-90 day cycles.
Why Businesses Love it: Who doesn’t love hard earned cash in their pocket faster? Businesses love invoice factoring because they can pay workers or put money into their business quicker and easier with money that’s already due to them. With no loans necessary, factoring is a fast and easy choice.
Good For: Businesses who sell to other businesses and have to wait for their invoices to get paid.
2. Working Capital Advances
Is your business generating revenue? Working Capital Advances can get you the cash you need.
How it Works: Working Capital Advances are determined by how much revenue your business generates each month. Repayment for the advancement is made by a percentage of your future monthly revenue. Typically companies must be in business for a certain period of time and producing a minimum amount of revenue month.
Why Businesses Love it: Unlike a bank loan, the approval process for a Working Capital Advance is quick, painless, and easy. If your business needs cash fast, Working Capital Advances offer approval in hours and provide funding in your pocket within days.
Good For: All businesses that have a reliable monthly revenue stream.
3. Asset Based Loans
Do your business assets contain value? Leverage your assets to help finance your business needs.
How it Works: If your business assets have value, Asset Based Loans offer funding based on the value of these assets. The loan is then paid back over time.
Why Businesses Love it: Asset Based Loans carry a lower interest rate and help meet cash flow needs for payroll, expansion, remodeling, new equipment, and more. This alternative makes the perfect solution for businesses with assets to leverage.
Good For: Businesses that have tangible asset-rich balance sheets and usually have at least half of their total assets in working capital.
4. Equipment Leasing
Need cash for new equipment for your business? Equipment leasing can fix that.
How it Works: If you need new computers, trucks, or machinery for your business, Equipment Leasing provides the funding you need. This funding will depend on a practical repayment plan and the needs of your business.
Why Businesses Love it: New equipment is an expensive financial investment. Equipment Leasing gives companies the option to lease equipment on a manageable payment plan. You get the equipment you need to run your business without the hassle or possible rejection of a bank loan.
Good For: Small or medium sized businesses that need new equipment for their company.
With banks tightening down the hatches on loans to businesses, alternative financing options are the fresh, new way to fund business growth and put money in your pocket faster and easier. Need help funding your business? Don’t hesitate to give us a call. We’re happy to chat about your needs and find a solution that works best for you.