You find out that your banker won't give you a business loan after weeks of answering questions, giving countless financial statements, and playing the "hurry up and wait" game.
What's next? Do you try again at a different bank? Possibly. But most banks have the same requirements for lending money. If you didn't get a loan at one bank, you probably won't get one at another. Even so, there's no harm in trying.
But there are other ways to get money that are easy to get and can work better than a business loan in some cases. Here's a very easy test:
How you do your business:
- Do you have business clients?
- Send at least $10,000 in bills each month?
Is your biggest challenge:
- Paying the vendors?
- Meeting payroll?
- Clients don't pay you for up to 60 days?
If this sounds like you, you might be a good fit for factoring or purchase order financing. Instead of bank loans, these two other ways to get money are easy to get. The most important thing is that you have strong business customers, like big companies or the government.
Factoring is great for business owners who can't wait up to 60 days to get paid for their invoices. Factoring gives you financing based on your invoices, which gives you the money you need to pay rent, suppliers, and employees. Unlike bank loans, there are no upper limits with factoring. How much money you get depends on how you bill. The more you bill, the more money you can borrow.
Purchase order financing is a great option for distributors, wholesalers, and re-sellers who have big orders they can't pay for. In a purchase order financing deal, the financing company pays your suppliers on your behalf and helps make sure that the goods get shipped correctly. When your customer pays the bill you sent them, the deal is done.
You can get the money you need to take your business to the next level through both factoring and purchase order financing.
