Where does that leave the businesses that do not fall within these "strong company" parameters -- like start-ups, existing businesses with cash flow problems, businesses whose owners have marginal credit, and businesses required to find another lender because it no longer fits it banks current credit culture?
It leaves them searching for alternative sources of financing. Businesses have had to adapt to current economic times, or close their operations altogether. As a result, it has become more vital than ever for business owners know all their options. Further, they should recognize and learn about alternatives financing options when traditional banks are not, or are no longer, an option for a business loan.
1. Asset-based loans: lines of credit secured with A/R, inventory, and equipment, or any combination of these business assets. Specific advances rates are employed to advance funds against these assets. For instance, A/R advances range from 75% to 80% of eligible A/R (up to 90% for gov't contractors), inventory advances up to 50%, and equipment advances from 20% to 40% depending on age and condition of equipment.
2. Factoring (aka Accounts Receivable Financing): the practice of selling your accounts receivable (invoices) at a discount to another company. You get the money from the company to which you sold your accounts receivable, and they then become responsible for collecting on the invoices.
3. Merchant Cash Advance: selling future credit card sales in exchange for a current cash advance. This option provides quick funding (usually within days), but is an expensive with rates from 9% to 39%, and origination fees ranging from 2 to 5 percentage points. It should be considered a short-term solution for businesses whose owners have marginal credit, little or no collateral, and significant monthly credit card sales.
4. Hard Money Financing (aka asset-based lending or private funding): financing common in real estate and construction characterized by short terms, big down payments, high-interest rates, and relaxed underwriting standards. This option is employed primarily by real estate investors with marginal credit and a need for a quick transaction closing on blighted properties that are to be rehabbed. Interest rates range from 11% to 18%, down payments of 40% to 50%, and origination costs ranging from 4 to 8 percentage points.
The telemedicine revolution is finally happening. Experts have been discussing the potential for patients and healthcare providers to connect remotely for years, but the market is just now moving to adopt it—in a big way. Data suggests this market will grow over 14% annually through 2020! more
If improving customer experience is important to you (it should be), then 2017 may be a good year to reevaluate the software you use for your contact center. With customer preferences shifting, the importance of an efficient contact center has never been higher. You cannot afford to simply focus on keeping costs low. Significant competitive advantages are available to businesses who manage this area effectively. more
The status of technology within an organization is rapidly evolving—and so is the role of the CIO. With breakthrough capabilities enabled by new technologies, a growing shortage of available developers, and an increasingly tech-savvy business user, the role of IT—and the CIO in particular—is morphing into one of strategic advisor to the business and driver of innovation within the company. more