Exploring Merchant Cash Advance Versus Invoice Factoring

Getting a Small Business Loan with Bad Credit in 2018

13:33 02 October in Blog, Business Financing

Since most people believe the Federal Reserve is planning to increase interest rates at least twice between now and the end of 2018, small businesses are likely to feel the crunch. This is particularly true for those businesses who have blemishes on their credit. Getting a loan with a shaky credit history is difficult enough, but in times of interest rate increases, the challenge is often greater.

Small Business Dilemma Securing Financing

If you are a small business owner, you already understand how important cash flow is to your day to day operations. In addition to meeting rent, or mortgage payments, you must pay your staff, purchase materials, and pay for the costs associated with securing new contracts. These cash issues are serious and without additional capital, your business is unable to grow and in a worst-case scenario, may even be forced to close.

For many small business owners, there may seem to be no easy solutions. However, this is not always the case because you may be able to access capital based on your accounts receivable. Invoices that are due within the next 90 days are not helping you if you need cash immediately unless of course, you can convert them to cash. You can!

Understanding Invoice Factoring

Invoice factoring does not depend on your credit rating. That’s the good news. The fact is, the creditworthiness of your clients provides the basis for determining whether you can factor your invoices. Another facet of invoice factoring is you do not have to factor every single invoice you have, you can select which customers invoices to factor meaning you can use one client, ten clients or every eligible client.

Invoice factoring is also faster than securing a business loan. In many cases, you can have cash in your bank account within days of accepting a factoring contract and having your customer’s vetted. This is important because this process allows you to focus your attention where it needs to be — on growing your business.

You may also elect to use a process called “spot factoring” which is a funding method where you simply take a valuable invoice and turn it into nearly immediate cash with no long-term agreement to continue factoring invoices for the client. This is common when a company has a single one-time need for immediate capital to get them over a period of slower cash flow that is not anticipated to continue.

Customized Solutions Mean Everything

Regardless of what your business credit situation is, your financing needs are not the same as every other small business. At Capstone Capital Group, we take the time to understand your business model, your goals, and your overall financial situation. Once we do that, we work on a customized solution to your financing needs. We understand the importance of cash flow to the long-term success of your business and we are committed to providing solutions to help you succeed.

Whether you are facing a temporary problem meeting your cash flow needs or you need a long-term funding solution for your business, you can count on us to develop a plan to help. We pride ourselves on finding a solution that is right for you regardless of whether your primary business involves providing service or product. Whether you need immediate cash to secure a contract, or you have other financing needs, contact our skilled team and let us work with you to find the right solution. We are here to help and we will do everything possible to help you keep your business financially stable without taking on more debt.


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