Types of Funding for Your Business
We offer a variety of funding options for businesses in many industries, but deciding which type of financing is best for your company can be challenging. That’s where we come in. Let us know what your cash flow problem is and what industry you’re in and we can get you the funding you need to continue growing your business to be successful.
Factor Finders specializes in getting businesses like yours funding, so let us know how we can help make this process as quick and easy as it should be.
Accounts Receivable Factoring
Accounts receivable factoring (or accounts receivable financing) is a popular form of funding for companies that need to close the gap between slow paying customers and having cash for other expenses, like buying new equipment for example. A factoring company will purchase your invoices at a discounted rate in order to advance a portion of the invoice to close that gap.
The factoring process is simple:
- Serve your customers like usual.
- Submit your invoices to the factoring company.
- The factoring company will verify the invoice.
- You will be advanced the cash.
Factoring can be beneficial for businesses in a variety of industries. A few that we see a lot would be transportation, staffing, manufacturing, distribution, oil and gas, and many more.
Having the cash to pay your employees can be difficult, especially if your customers don’t pay you for 30 to 60 days. Businesses use payroll funding to get their employees paid and keep their business operating and growing by working with a factoring company.
Working with a factoring company to get payroll funding can get you up to 95% of your invoice advanced, within 24 hours of submitting them, so missing payroll again won’t have to be a concern. The money can be used for paying employee wages, worker’s compensation, benefits and other requirements as an employer.
Companies, such as staffing agencies, use payroll funding instead of a traditional bank loan because factoring doesn’t create any debt since the money you’re being advanced is already yours. It’s easy to get approved and less-than-perfect credit is acceptable.
Purchase Order Financing
P.O financing is used to fund companies that need coverage for additional supplies or costs that deal with manufacturing and shipping.
If your business has a rapid increase in growth, seasonal highs and lows or funds set aside for other expenses, you could benefit from purchase order financing. Typically, this type of funding is used for companies in the distributor, manufacturing, industrial industries, or those that have government contracts.
To qualify, you must have:
- At least 20% of the minimum gross profit for transactions
- Conducted a similar business with similar clients
- Your first transaction of at least $100,000
- Qualified P.O.s or letters of credit
Single-invoice factoring is useful for a business that only wants to factor one invoice without having to commit to a contract for a set duration. With traditional accounts receivable factoring, companies typically factor on a monthly or annual basis, while spot factoring is a one-time transaction.
The process of spot factoring is similar to traditional invoice factoring in terms of serving customers and getting an advance, but it’s important to find a factor quickly if you’re looking to factor one invoice to get you paid faster.
I’ve Read Enough – Get Me Funded
Haven’t seen what you need yet? Don’t worry, we have more options.
Unsecured Business Loan
This funding option is a monetary loan paid out to a company or consumer. Unlike a secured loan, an unsecured loan allows businesses to qualify without securing the loan with other assets.
With an unsecured business loan, companies can borrow up to 90 percent of their gross monthly sales to improve their cash flow, even if their equipment or other assets are already pledged as collateral to a bank, for example. Interest rates are a little higher than a secured loan because there is some added risk, but companies can offset this by applying for a longer-term loan.
The process of obtaining this loan is faster than a traditional bank loan. To start, you’ll need to fill out our application and send us three to six months of bank statements. After that, lenders will have a funding decision made within hours, and you can have your money within 48 hours.
Merchant Cash Advance
MCAs are a funding option for businesses that involves an advance of a fixed amount in exchange for a percentage of that business’s future daily credit or debit card sales. A merchant cash advance is cash in exchange for future sales.
This funding options is very quick and flexible. Because your payback is set to a percentage, rather than a set amount, if your sales are low, your payback will be low too.
Qualifying for MCAs are easy because it doesn’t require collateral. You must have:
- Been in business for at least six months
- $5,000 in overall monthly sales
- A positive checking account (business account, not personal)
- A credit score of at least 500