There are many kinds of business financing solutions available to small business owners. Let's take a look at just a few.
Alternative business financing method #1 - Credit Cards. Business credit cards are actually much easier to obtain than normal business bank loans. If you walk into a bank and apply for a business loan, there are many underwriting guidelines you are going to have to meet in order to be approved. Examples of these guidelines include but are not limited to: time in business, existing revenue, debt service, tax returns, business credit scores, a written business plan, financial projections, and more. To qualify for business credit cards, you need anyone owning 15% or more of your business to have good personal credit scores (this means a score of 700 or higher with all three credit reporting agencies) and good debt usage of 30% or fewer.
Alternative business financing method #2 - Automated Clearinghouse Revenue Financing. This method considers mostly your business revenue as a basis for making the loan. They look at how much is deposited into your business checking account on a regular month in and month out basis. The reason for that is how this loan is paid back. The lender will take a small automated clearinghouse (ACH) payment from your business bank account on a daily Monday through Friday non-holiday schedule. That means the lender expects the funds to be there for payment daily. This type of financing is good for those businesses with daily recurring revenue.
Alternative business financing method #3 - Account Receivable Factoring. In this method, the only consideration taken by the lender is your open accounts receivables (open invoices) with other businesses. The nice thing about this type of business financing is that the credit of your customers will be looked at, not yours or your business credit. You can receive up to 97% of your invoice amount and not have to wait for your customers to pay. You can also use this type of financing to offer credit terms to your customers.
Alternative business financing method #4 - Merchant Account Advance. With this business financing method, only your monthly credit card receipts from your merchant processing account are considered. This business loan program advances your funds based on your last three to four months worth of merchant processing receipts. The method of repayment is a small percentage of each new credit card payment. This percentage is then sent to the lender instead of coming to you. The typical loan repayment period is nine months.
By completing the business finance pre-qualification test you will be shown what traditional and alternative types of funding programs that your business pre-qualifies for not and have to pre-qualify for them in the near future.