Business Credit
Do you have some short-term cash needs? There are several different options pertaining to business credit, one of which is known as trade credit. Trade credit involves two businesses that trade capital in order to manage their short-term needs. This allows a business to forego a traditional bank loan as they can create their own funding working with other businesses to acquire the raw goods they need to stay in business.
Since the recession hit banks hard, many of them are unwilling to offer any type of business credit as they are weary about being burned again. This has forced many businesses to look for alternative sources of business credit to provide for their customers and employees.
One of the most popular ways to acquire funding is through online lenders. Unlike the local banks, online lenders usually only ask for a credit score of 680 to approve you for an unsecured or secured loan. If you want large amounts of financing, say upwards of $25,000 you will need to front collateral to secure the loan. Depending on your needs and your credit, you can acquire an unsecured loan for about $10,000 or less.
When you use your assets to secure a loan, you are placing this item at risk. However it’s the easiest way to convince a lender to give you the money. Asset-based lending as it is commonly called is a great way to fix problems within the organization such as cash-flow problems and inventory problems. Take a look at your business assets and your personal assets when you are considering asset-based lending as this will allow you to reduce your interest rates on the loan.
You also have the option to acquire financing using your credit card receipts. As long as your business is able to generate a certain number in credit card sales, you can borrow from those future purchases. This is a great way to repair your cash flow in a hurry. Its also a great way to get some money to pay for your raw goods and invoices that you have.
Factoring is another option you have to acquire quick cash. Factoring involves selling off your old invoices to receive 80% or more of the total invoice amount. This way you don’t have to sit around and wait for the customers to pay on their invoice so you don’t have money tied up in other things, causing you to miss payments to your vendors.
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This has forced many businesses to look for alternative sources of business credit to provide for their customers and employees. http://www.corporatecreditconcepts.com/directory/business-credit.html
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