How Fast Can You Get A Working Capital Loan
Small businesses looking for a fast working capital loan often need the funds to make payroll or to pay an unexpected expense. Certainly a bank is one of the cheapest places to get capital for your business however often the turnaround time makes it almost impossible if you need the money fast.
Banks Care About Your Revenue, Profit and Collateral. Period.
No matter how good your idea or product is the only thing a bank is going to care about to help you get a fast working capital solution is what your yearly sales are, how much profit you made and what type of collateral you have to back up the working capital loan.
Getting a business line of credit is really hard and it normally will take 6-12 weeks to get in place. Plus, each year, there will be certain conditions that have to be met. One condition will be that your bank will require you to submit audited or reviewed financials from your accountant which is expensive. The second thing a bank will require is that for at least 30 days, your line will need to be brought down to zero for a 30 day period of time. Third, each year the bank will want to re-approve your line. In the 15 years that I had a business line of credit I neither found it easy nor fast dealing with a bank and having a backup financing alternative like Payroll Financing Solutions certainly would have helped me through some tight spots.
Your Receivables are Collateral
A company like Financing Solutions positions itself against banks in that FS puts more value in how much others owe you. FS moves with lightning speed (often in the same day) and Financing Solutions can see quickly how good your business is based on the fact that the owners have built several small businesses over the last 20 years. A bank officer is only going to look at your financials where as FS looks at a variety of touch points. The one touch point that FS looks at the most is the initial interview you do. In that interview FS learns about how well you know your business, if why you need the money makes sense, if you have credibility and if you have the funds down the road to pay the funding back.
Payroll Financing Solutions Will Not Get Between You And Your Customers
If you decide to work with FS the money will be wired to your bank account immediately for you to use as you like. The next day, their will be a small daily ACH from your bank account to pay off the funding requested and that amount will continue each business day until the funding is paid off. FS is using your receivables as collateral however we do not get between you or your client unless their is fraudulent activity. FS is a spot funding company and is not a traditional long term factor. A traditional factor will want your receivables to go directly to them in exchange for providing you will a 80% advance and your clients will know that you are using a factor. If after 90 days that receivable is not paid by your client, the factor will want the money back. A traditional factor will also want a long term relationship with you and that is what makes them so expensive. In FS’s situation, your relationship with them is only for a short period of time and therefore, the costs are a lot less then a factor.
In general, every small business should try and have a bank line of credit in case of emergencies. However, that same business should also know about and have a relationship with Financing Solutions just in case you need fast a working capital solution.