You may have exhausted your options at the banks in town and you could start to lose valuable business if you don't get some financing soon. Maybe you have received bank financing but because you've had a tough year the bank says you no longer fit their lending guidelines. Or maybe you have a good relationship with the bank and you are looking at some strong growth, but the bank has given you all they can. Before you get to this point, it is appropriate to shop for non-bank financing alternatives in the form of factoring or asset-based lending. Alternative finance is an unregulated industry. Prices, service quality, and reliability vary widely. Pricing may vary from 10 to 40 percentage points above the Prime Rate (nominally, the rate banks offer their most creditworthy customers) so the savings to be gained from smart, old-fashioned comparison shopping can be considerable.
Fast and Easy
Factoring or Asset-Based Lending is easier and quicker to obtain than conventional bank lending. Most good providers can routinely evaluate an application and provide funding in 2 to 3 weeks.
Factoring offers a number of benefits to cash-starved companies, which often use the money to meet payroll, fund marketing efforts or provide working capital. Essentially, the factor pays your business cash now for the right to receive future payments on your invoices.