The world of business can be a tough place to navigate without good advice from seasoned professionals, formal schooling, or a great mentor. But, it can be navigated successfully either way. Many times, it is very difficult for a small business owner to obtain a bank loan because of the lack of a stable income, making it difficult for them to stay afloat until their business starts to turn a profit. Truthfully, it can take years for a small or moderate sized business to generate enough income to have sufficient cash on hand to run their daily operations. However if you turn to professionals it can make the whole process easier Orion Business Capital. Here are several finance options that are available to help small business owners keep their heads above water until the profit margin starts to expand in their favor.
- Account Receivable Factoring
This service allows the business owner to sell some of their accounts receivable or invoices in order to have cash on hand. These accounts or invoices will then be turned over to the factor who will give the business a cash advance on a percentage of the total value of the account receivables. The small business will be charged a small fee and once the receivables have been paid in full, the remaining balance will be released to the business owner.
- Account Receivable Financing
This service the owner to sell their account receivable to the factor who assumes the risk of the debtor loan. The factor will purchase the receivables at a discounted price, then make contact with the debtor to receive payment for the loan amount that was financed by the business.
- Purchase Order Financing
This service allows business owners to borrow money to pay their suppliers upfront. This is a short-term loan that can be obtain with a verified purchase order. When owners are able to pay upfront it provides opportunities for discounts, larger orders, and faster deliveries. Thus, creating opportunities for their business to establish trustworthy relationships with suppliers and customers. This service can be adjusted up or down to meet the needs of the business.
- Asset-based Lending
This is a loan that can only be secured through collateral. The business owner can use their inventory or other assets like their accounts receivable as collateral. The interest rates on this type of loan is low because the loan holder can seize the assets if the loan is not repaid.