Why Commercial Factoring is No Longer Smart
As a small business owner, you are obviously working very hard. But are you working smart? If you are still seeking commercial factoring for your quick business funding needs, then the answer is no.
Commercial factoring used to be the way to go for many companies because of how hard it was to get a business a line of credit or fast business loan from a bank. However, things have changed a lot, and you now have smarter options.
The Truth about Commercial Factoring
Commercial factoring is typically viewed as the only way for small business owners who don’t have tons of collateral or a stellar credit history to get quick cash when the banks turn you down. Basically, it permits you to use your account receivables and invoices in exchange for payment upfront, without waiting 30, 60 or 90 days for them to become due.
It can seem like a dream come true for cash strapped business owners, but you should be aware that there are disadvantages. In truth, anytime there is a third party separating you from your money, there are risks.
For one thing, most factors insist that your clients send payments directly to them, not to you. This signifies to your customers and employees that you are having financial difficulties, which could affect your future business relationships.
Also, your clients must have good debt records and a history of paying their invoices on time. If they don’t, both your company and the factor will be put in an awkward position.
Are There Alternatives to Commercial Factoring
Today, it is no longer necessary to deal with the hassles of commercial factoring. Lines of credit are now being offered through alternative lenders like Financing Solutions (www.financingsolutionsnow.com), which allow a business to have access to capital anytime they need it, and to pay back that capital when it is convenient.
Financing Solutions is a leader in providing business lines of credit to good companies that just need a little help to survive. Existing businesses can get a line of credit for up to $150,000. Best of all, it is easy and inexpensive.
Smart Ways to Grow Your Business that You May Not Have Considered Before
Everyone is looking for that elusive, secret key that will bring them business success. While there are no mysterious tools for making your company profitable, there are ideas you might have overlooked.
One wise business strategy is to offer financial and professional development to your employees. Many business owners think that if they help workers get smarter at their jobs or give them personal improvement assistance, the employee will leave. They also may believe that this is a waste of company time. On the contrary, studies have shown that these initiatives provide a significant return on investment in the form of a better reputation for your company, higher retention and increased productivity.
You can also work to educate your customers. Some examples include offering workshops, videos or webinars about your processes. This can be especially helpful if your methods are complicated or not immediately obvious. In doing so, you will generate goodwill, highlight the benefits of your product and explain how you solve problems, which serve to create demand and increase sales.
Another action you might not have contemplated is contacting Financing Solutions for fast business cash to grow your company. In a world of uncooperative banks and questionable lending practices, they are the smart alternative.