For small businesses, cash infusions can be vital to surviving lean times and preparing for growth. Yet, it can often be difficult for small business owners to obtain the bank loans they need. In fact, it can be practically impossible for small business owners to obtain a bank loan due to restrictive loan requirements.
Given the inability to access bank loans, small business owners often wonder where they can turn to obtain the cash they need to fund growth projects and even survive during slow periods. Fortunately, alternative financing is far more readily available today than it was just a few years ago.
Factoring is just one of the alternative financing options that many small business owners often turn to when they are not able to obtain a small business loan. Factoring may sound like a modern financing tool, but in reality, it has been around for thousands of years. Since then, it has evolved significantly, but the primary concept has not changed. By selling your receivables, you are able to receive an advance cash payment to help with your cash flow needs.
The problem with traditional forms of factoring is that they are often better suited for large companies. Small business owners may still find that they are unable to qualify for traditional forms of factoring due to the fact that decisions are often made based on the company's clients rather than the company itself. This type of structure often does not work for small businesses, which often have a large client base.
Factoring 2.0™ presents a different approach to financing for small business owners. Clients are handled as a single entity, with approval decisions made on the applicant's cash flow in addition to a myriad of other factors. Additionally, Factoring 2.0™ also accepts future receivables, making it possible for small business owners to be eligible for even greater amounts of capital.