Financing Solutions, What is it and How Can Your Business Use It?
WHAT IS FINANCING SOLUTIONS
Financing Solutions is spot financing usually for dollar amounts of $5,000 to $100,000 that businesses can use for whatever they like. However, the funds are usually used so that a business can make payroll in a emergency business loan situation. The term payroll funding or payroll financing began to describe that the financing was intended for established businesses and not for start ups. Payroll is one thing that a business owner can not miss so in many cases, Financing Solutions is used for businesses that are often looking for a short term bank loan, a working capital loan, a quick business loan, a fast business loan or Factoring.
IS FINANCING SOLUTIONS A FORM OF FACTORING
Yes, Financing Solutions is spot Factoring which means that the alternative lender is going to use your receivables (the money others owe you) as collateral to back up the funding that they lent to you. The alterative lender is providing funds to you in exchange for your promise that you will pay back the funding over a specific period of time. In many cases the payment plan will be a small daily automatic payment out of your bank accounts each business day which is called an ACH. If you fail to pay off the funding then the alternative has the right to not only take your business to court but can also request that your client pay them directly.
IS FINANCING SOLUTIONS EXPENSIVE
It is often in the eye of the beholder if payroll funding is expensive. Financing Solutions is intended to be a short term business loan so in the whole scheme of things, it is better to take out the financing then it is to miss payroll. However, if you can get a business line of credit then that would be the cheapest alternative.
WHAT ARE THE BIGGEST BENEFITS & NEGATIVES OF FINANCING SOLUTIONS
Financing Solutions is fast, easy to get, and you are not locked into a long term financing deal. Financing Solutions also solves a big headaches in that if used correctly, you will make payroll. However, the negatives are that it will cost your business money and that you will have to pay back the financing or your company is greatly at risk of being sued. If you cause any fraudulent activity like closing your bank account, you can be personally liable.