Different Financing for Different Phases of Business

Business Financing for All Phases of Growth

The success or failure of your business often depends on a number of variables: products, sales, management, marketing, planning, and financing. There are many ways to finance a business and invoice factoring is an option growing in popularity. So, which types of financing work best for different stages of business growth? It is important to realize that one financing option may be good for business in the early stages of growth, but may be a disaster when the company is more established.

Startups often seek financing from investors because the business is not obligated to make payments right away. Mature-phase businesses frequently use traditional bank lines, accessing equity and debt as needed. A business in the growth-stage doesn’t want to dilute their equity ownership with investor money. At the same time, a growth-phase business doesn’t want to squander the little cash flow it has by making monthly payments on a line of credit. They usually are looking for alternative ways to infuse cash without incurring debt.

The Best Financing for Growth Phase

One of the best financing options for growth-phase businesses is invoice factoring. This option improves cash flow and at the same time preserves ownership.  Since invoice factoring is just trading one asset (invoices) for another asset (cash), no debt is created, and no monthly payments need to occur.

Although invoice factoring seems to be uniquely suited to growth-phase businesses, some start-ups, that have already produced and delivered product, can also use invoice factoring. Additionally, some mature businesses, also like using invoice factoring when traditional lines are maxed.

To see if invoice factoring is right for your business, give us a call at 1-800-405-6035 or by filling out a rate form and a factoring specialist will get in touch with you right away.

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