When it comes to your money, having all the facts is essential. That’s the only way to make responsible choices. By comparing the details between a Kabbage line of credit and funding from Financing Solutions (www.financingsolutionsnow.com), you can decide for yourself which is best for your business.
Kabbage is a large complex public company that uses public money to loan out to businesses. As a result, they have restrictive lending standards. Financing Solutions is a privately owned company. They provide a business line of credit using their own money. This allows them to make more approval decisions faster.
Financing Solutions can give you a written offer to consider by answering 10 simple questions online or over the phone. They will not run a credit check until you approve the offer letter. Kabbage uses only algorithms to decide whether or not they will approve your business for their instant business funding and they will instantly run a credit check when you apply.
A Financing Solutions line of credit is less expensive than a Kabbage business line of credit. Not only does it cost nothing to setup but they will even provide a financial incentive to get your line in place. On the contrary, Kabbage charges monthly fees.
At Financing Solutions, they use a more hands on, people-dealing-with-people approach. With Kabbage, you never talk to a real person. Everything is done online. Therefore, if you don’t meet the strict criteria of their computer algorithm; they will deny your application. This means that you have no opportunity to explain any kind of financial missteps or reasons for a temporary cash flow issue.
Financing Solutions is run by veteran entrepreneurs with more than 25 years of experience in small business funding. Kabbage is run by a Wall Street firm. The owners at Financing Solutions really understand small businesses because have built businesses themselves.
Financing Solutions works with more industries than Kabbage does. For instance, Kabbage doesn’t work with nonprofit organizations, but Financing Solutions helps 501c3 companies all the time.
The amount of paperwork you will get from Financing Solutions is a whole lot less than Kabbage. Financing Solutions asks for easy to obtain documents, such as a driver’s license or most recent tax return. Kabbage operates much differently. They demand that you log into your various business services, such as your business checking account or QuickBooks, and then give them access.
At Financing Solutions they will assign a steadfast, knowledgeable account manager to your account that you can speak to at any time. They make it simple to always connect with a real live human. When you use Kabbage, all you get is an underwriting platform and metric analyses.
You get more flexibility at Financing Solutions. For example, you can change the payment dates, etc. With Kabbage, they lock you into a set six to 12 month repayment schedule.
At Financing Solutions you will have the extra bonus of a convenient, easy to use customer portal. This will show you all the information about your line of credit, line balance, renewal date, etc.
What to Consider before you Get a Business Line of Credit
Positive cash flow is the lifeline for any business. How you get it may mean the difference between a victory and a defeat for your company.
There are many different types of options for a quick business loan. Many small businesses have found success with a business line of credit. You must learn more to decide if it’s right for your business.
Why is it Beneficial to Have a Business Line of Credit?
A business line of credit acts sort of like a credit card. You get a supply of cash that you can draw from at any time. This makes it ideal for the small business owner because it gives you the cash you need to pay for things that you can’t purchase with a credit card. So you can make payroll, purchase supplies and pay business taxes.
It also helps you even out cash flow. Most small businesses experience a time gap between when a sale is made and when you actually get your money. Customers get 30, 60 or 90 days to pay but your creditors expect their payment today. As a result, you could run out of cash.
Studies show that the number one reason why more than half of small businesses fail within five years is that they run out of cash. If you have a line of credit, you can use it to make payments until the money from your customers comes in.
Perhaps more importantly, a line of credit helps you build your business credit history. To get the best terms on a small business loan, you need to establish your business credit. With a line of credit, you can pay for things from your business account. Paying the money back on time demonstrates that you are a good credit risk.
Best of all, it’s typically easier to get approval for a line of credit from Financing Solutions than from a commercial bank offering a business bank loan. To get a loan from a bank you need tons of collateral and an excellent credit history. Banks are much more conservative about giving out a business line of credit due to regulatory requirements.
Are There Any Disadvantages to a Business Line of Credit?
Nonetheless, you should be aware that there are also disadvantages to having a line of credit. For one thing, the most you may qualify for is a secure bank line of credit, meaning you have to back it up with some capital. Some business owners settle for a home equity line of credit, which forces you to put your own house at risk.
Also, since it’s so convenient, it becomes easy to overspend if you are not careful. Exceeding your limit is a no-no. Doing this or not keeping up with your payment schedule may cause the bank to call in your line of credit. If this happens, they will ask you to pay the full amount immediately.
Additionally, banks don’t really like to award lines of credit for the purpose of managing cash flow. If you have difficulty managing your cash, banks see that as a poor reflection of your business as a whole.
What Are Some Different Types of Business Strategies to Consider
Every business needs to adapt and flourish in order to survive. How you do that is dependent on adopting the right strategies to help you achieve your goals.
Growth strategy: this involves introducing new products. You can also use it by adding new features to existing products and services. Finding new markets is another way to encourage growth. Some companies do this to keep up with the competition. A good example of a growth strategy is Gap introducing their Fourth and Towne brand to market to women over 35, which it had not done previously.
Product differentiation strategy: you can do this to show why your product is different or better than that of the competition. This is especially useful in industries that have numerous competitors offering basically the same product. It can also help to build brand loyalty. One shining illustration of this strategy is T-Mobile. To compete with competitors like Verizon and AT&T, they now use a pink color pallet and paying off transfer fees for those who switch carriers.
Penetration pricing strategy: this is when you charge an unusually low price for a product that is new to the market. You count on consumers being willing to pay a little bit of money to try out something they have not seen before, like new technology. It’s very effective because people can’t like a product they don’t know about and this provides a smart introduction. This strategy can be seen with Netflix. When the company first hit the scene, Blockbuster was the biggest game in town. Netflix had to convince consumers to wait a day for their movies, instead of picking them up immediately. To do this, they were practically giving away memberships for only one dollar. It is now a huge hit and video stores are a thing of the past.
Which strategy you use depends on the unique characteristics of your business. Maybe just one is helpful or you might need a combination of these strategies.
Of course, none of these strategies are possible without enough business working capital, which you can get from Financing Solutions. With their help, your business can not only survive, but thrive.
Business magnate Dale Carnegie said, “A successful man will profit from his mistakes and try again in a different way.” This is also true of successful businesses. For example, if you are looking for a Kabbage line of credit you may want to try something different instead, like Financing Solutions.
In business, you must be daring, visionary and different. This is how you separate yourself from the pack. It’s also how you find new solutions to old problems. Therefore, if you think a Kabbage line of credit is the only way to get fast business funding, it may be time to think again.