When your business runs into a financial obstacle, it can be difficult to figure out the right course of action. While it might seem like your only option is to take out a loan through a traditional lender like a bank, there is a multitude of better options to consider. Alternative lending services can take many forms and offer you some serious solutions to whatever issues you’re currently facing. From asset-based lending and sales leaseback services to factoring your invoices, you can be sure that there is a perfect fit to correct your financial setback.
Accounts Receivable Financing
Have you ever experienced problems with your budget due to late payments from your clients? This happens more often than you might think, which is why factoring is a popular alternative financing option. A lender that provides this service will assess your invoices and purchase qualifying accounts receivables from you. You receive a percentage of the value, pay a fee, and receive the difference upon your customer’s repayment to the lender. This is a wonderful way to boost cash flow when you’re stuck due to circumstances beyond your immediate control.
Assets and Lending
Another popular alternative option you can explore is asset-based lending. When your credit score isn’t where you’d like it to be, ABL can provide you with a perfect alternative to traditional lending solutions. As long as you have assets of a particular value, like property or equipment, you can secure financing by using them as collateral. Business owners often use this service to stimulate cash flow and have access to capital during times when income isn’t a guarantee. There are also interesting options within this service, like considering a sales leaseback, so be sure to go through all the details.
A Line of Credit
Finally, a loan isn’t the only way to borrow money from a lender. If you don’t need immediate access to cash, you might want to look at a credit line as a solution for any future financial problems you encounter. A line of credit, unlike a loan, is only repaid when it is used. Once you pay off the balance, you can continue to use the credit line for as long as the terms of your agreement allow. If you need a safety net for the uncertainty of the future, this is a way to give yourself peace of mind.
Whether you look into how your assets can help with a sales leaseback or you simply need a line of credit for a rainy day, alternative financing services can be a huge lifesaver. Look at the various options in front of you in detail to see which is best for you.