As a business owner, you’re in this for the long haul. You’ve spent a good portion of your life, and possibly even your own finances, building this business from the ground up. You’ve done your best to manage your cash flow and provide superior customer service.
Now, the time has come for you to expand your operations. Maybe you’re thinking about hiring new staff members, finally investing in that big piece of equipment, or opening a second location. In order to make turn these plans for growth into reality, you’re going to need an infusion of financial resources, which means you’re going to have to choose a financial institution to work with.
In many cases, a business owner’s mind will immediately think “bank!” Yes, banks have traditionally been a reliable source of financing for small to mid-sized businesses, and they remain a good option for getting the capital you need. However, utilizing a bank for financing means you must be “bankable,” a standard that not all businesses can meet. So if you’re not bankable, what are your financing options?
That’s where The Commercial Finance Group in Atlanta comes in. We provide factoring, receivables financing, and asset-based lending solutions that can help your business build a bridge to bankability.
Keep reading to learn more about our factoring company and how why you should consider us for your future financial needs.
How Factoring Is Different From A Bank Loan
A bank loan is a type of debt, and although necessary and helpful in building your long-term credit, this means that they’re liabilities. Too many liabilities on a balance sheet and you may find yourself with strained business relationships and cash flow problems.
Unlike a bank loan, factoring doesn’t increase your debt. Factoring removes liabilities (unpaid invoices) from your balance sheet by making it possible to sell them to a third party (the factoring company. The factoring company, or factor, they assumes responsibility for collecting payments.
Reasons Businesses Choose Factoring Companies Over Traditional Lenders
Now that you’re familiar with how factoring works, let’s take a look at just a few of the reasons that businesses may choose them over traditional bank loans.
- Timing – Banks can be a great source of working capital, as long as you’re willing to wait for it. Applications for bank loans can take days to complete, and even longer to review and process. At the end of a several week process, there’s still no guarantee that your loan application will be approved! If you’re in need of working capital on a strict timeline, factoring is a superior choice. Most factoring companies can provide funding with 24 hours of approval.
- Credit History – Banks demand a long and healthy credit history before they’re willing to lend money. This makes sense because it protects the bank from unnecessary liability, but it can also be a hindrance to businesses that don’t meet their standards. For example, new businesses may not have enough credit history to satisfy a bank, and past financial decisions may have damaged an old business’s credit rating. In contract, a factoring company places less weight on the things that have happened in past, and focuses instead on payment histories.
- Flexibility – They say the only things that are sure are death and taxes, but we’d proffer that bank loans are a close third. When you accept a bank loan, you agree to a certain interest rate and monthly payment, neither of which changes for any reason, including a slowdown of revenue in your business. Factoring, on the other hand, is basically a cash advance on work that has already been completed, so no repayment is necessary. This allows your business to move forward with greater flexibility.
Contact The Commercial Finance Group For Factoring Finance
If you’re interested in alternatives to a traditional bank loan, and would like to know more about factoring, contact us! We’d be happy to answer any questions you may have and get your started on your path to greater working capital today. We’ve helped companies of many different industries and sizes overcome cash flow problems so that they can achieve growth, and we’d be honored to do the same for you. Give us a call or drop us an email now.
