Many business owners are excited by the prospect of financing and their ability to use outside funds to expand their businesses. Besides family and friends, there are basically four types of investors:
- Venture capital firms
- Banks offering business loans
- Angel investors, and
- Crowd funders
The basic ticket to entry is a business plan that shows the risk factor of the venture and the expected return on investment. This can be enough for an angel investor. However, these types of opportunities are relatively few and far between. A more likely source of capital is a bank. However, a company and its owner must have high creditworthiness and work under a set of bank guidelines. Unfortunately, during the most recent recession, bank funds also have limited availability. Venture capital companies sometimes offer the best financial packages for growth, but they expect to get a high degree of control with the company in return. Some start by replacing upper management with their own people. They do not generally look at companies without at least a five-year proven track record.
Get Financing and Keep Control
If a business owner wants to keep control of his or her operations, then the true availability of growth capital is very limited. This is even true for the business owner who discovers an obvious opportunity. The owner will often find that lending institutions are extremely risk averse. However, business owners that find themselves in this situation have an excellent financing alternative: invoice factoring.
Do Business Your Way
Factoring companies are not interested in changing a successful business, taking ownership, or receiving shares. When a company has a steady stream of invoices, factoring can solve the delay of collecting funds on accounts receivable. For a company operating on a net 90 arrangement and large monthly billings, this can be a significant amount of cash. For many businesses, this can be exactly the cash inflow needed to meet the next growth opportunity, deal with an increase in customer demand, or purchase new assets.
Find out the capitalization benefits available to your company through factoring your business invoices.
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