Over the past week I have been approached by a number of business owners from rural England all with the same problem - a growing business which their banks won't support. This is a large scale problem for many businesses though there are solutions available.
Every business has a range of assets which can be utilised to secure their working capital requirements although many business owners are unaware of them. In this article I am going to outline a number of options that you might want to consider.
Does your business have inventory?
If the answer is yes then your existing business bank can offer you an overdraft that is secured all or in part by your inventory. They often wish to combine this with other lending products such as invoice financing, or factoring as it is often referred too.
Do you offer credit terms?
If the answer is yes and if your business has been trading for more than 12 months your business bank can often advance up to 75% of the invoice value which can be used to enhance cash flow in your business. If your bank won't or can't offer this funding option there are private funding options available.
Does your business offer credit / debt cards as a payment option?
If your answer is yes and if you have been trading for normally a minimum of 6-months then there are a wealth of lenders available whom can advance up too one month of average processing amount. This loan is then repaid over time as a percentage of your future card transactions.
Does your business accept PayPal?
If yes then there are lenders who will lend up to one months average transactions as a short term loan which is repaid out of future transactions.
Does your business import?
If yes then depending on the product and country of origin it is possible to finance up too 109% of the purchase cost and then repay the loan as you sell your inventory.
There are a few other options available too you although these are the most common and easiest to secure.
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