They say that any dummy with a half decent idea can become a millionaire so why do you feel like you need finance for dummies? Actually, you’re not a dummy at all. You just need to learn the facts.
Truthfully, there are just some people whose minds can understand finance while others find it difficult to understand key business concepts. It doesn’t necessarily mean you need finance for dummies. We all have our strengths and weakness.
Why Finance for Dummies (and not so dummies) is So Important
Every business owner encounters situations where they have to look at financing for their business. It might be a line of credit, business loan, account receivable factoring, leasing or other forms of financing.
The problem is that’s it is all so confusing. You may wonder if you should read finance for dummies. And you are not alone.
But you must be able to grasp various concepts concerning small business financing. This is the only way to discover what’s right for your business.
What Are the Different Types of Finance for Dummies (and the Smart)?
Business loans – probably the most common option for borrowing money. While this may keep you in debt for a longer period, you can also keep more cash in your pocket with smaller payments that can stretch out for several years. However, small business loans are tough to qualify for. Since banks use other people’s money to make business loans, they don’t like to take risks by working with small businesses. In addition, you must provide tons of paperwork and proof that you can pay the money back.
Factoring – this is when you use future monies that your clients owe to help fund your business. A lending company, or factor, will purchase these debts and give you a portion of their value upfront. If your business works a lot with invoices, then you probably give your customers 30, 60 or 90 days to pay. Factoring your invoices is a funding option that will give you some business cash now. The downside is that the factor will contact your clients, basically letting them know that your company is struggling. And no one wants to stick with a sinking ship.
Asset based lending – if you have resources like equipment or real estate, you can borrow against it. Many banks have a separate asset finance operation to handle this type of small business funding.
Leasing – businesses that don’t buy their fixed assets typically lease them. Leasing prevents tying up money with a major, expensive purchase. In most cases, they will eventually own the asset. Yet, since they don’t actually own it in full right now, this makes recording the item tricky. It also may be problematic to use it as the collateral that most lenders require.
A line of credit from Financing Solutions – this is a set amount of money that you can borrow from whenever you need it. You can draw from it for everything from making payroll to taking advantage of new business opportunities. It’s ideal for emergency business funding or to manage the inevitable uneven cash flow common to most small businesses.
With help from Financing Solutions (www.financingsolutionsnow.com), you can get this short term business funding quickly. Their online application takes just minutes to complete. This is the kind of finance for dummies that anyone can understand.
In fact, the entire process, from start to finish, can all happen in the same day. For most businesses, you can get your money in 72 hours or less. More importantly, they don’t check your credit until you decide to move forward and they don’t ask for personal guarantees (except in cases of fraud). Even a dummy can figure out that this is the best funding option for any business.