Every small and medium enterprise needs financing to move forward. There was a time traditional banks were the go-to option for all of them in need of business financing. But with evolving times, the way SMEs get their funding has changed too. They no longer depend upon the restrictive, arduous, and long-drawn bank processes to avail financing for their growth. Out of the many reasons behind this drastic shift in preferences, the most significant detriments are conditions like heavy collateral's and high credit scores put forth by traditional banks.
Now add to this list hassles like heavy documentation, unnecessary legalities, and a long wait. No wonders SMEs have had a 180 degree flip in their preference as they flock to alternative lenders, like Cresthill Capital and Mantis Funding, where the loan approval process is a breeze. No heavy collaterals, no minimum FICO score demands, and the loan disbursal process is super fast. Who wouldn't like that?
In view of this drastic shift, let us take a close look at the three important offers in the alternative lending landscape.
Invoice Factoring or Accounts Payable Financing
A savior when clients don't clear invoices on time, and you are left stranded with pending payments. Suppose you have a big check coming in next Monday and are depending upon the money to purchase new inventory. The client cites some reason for an unexpected delay, but you have already placed an order. Oops! This is where invoice factoring or accounts payable funding step in.
Invoice factoring or accounts payable funding is offered by alternative lenders, like Crest Hill Capital and Mantis Funding, wherein the amount of the outstanding invoices is paid to the borrower with an understanding that they would repay it upon receiving their pending payments from the client. As many Cresthill Capital reviews suggest, businesses struggling with tight cash flows due to payment delays have found these offers godsent.
Merchant Cash Advance
Merchant cash advances are like taking an advance on your future income/revenue. Here the applicant business gets a desired amount of cash immediately in lieu of a portion of their future sales. Instead of a fixed payment, you're offering a small percentage of your daily revenues.
Micro-funding with a merchant cash advance, the applying businesses' daily transactions (usually the ones through debit or credit cards) are used as a base to come up with a shareable profit percentage. Merchant cash advances can be both short and long term as per the conditions decided between the lender and the client.
Small proprietors, small businesses with very few employees, home-operated companies, and online businesses usually opt for micro-funding when they need a very small amount of money, like $10,000 or less. Such businesses find it almost impossible to get through the traditional bank's credit process and are often rejected.
With micro-funding, small startups and businesses can avail quick cash that they can repay in equal installments, just like a traditional credit deal. The documentation is less, and the underwriting process is more flexible.
Which of the above microcosm of alternative lending landscape appeals to you the best? Micro-funding, invoice factoring, or merchant cash advance? Let us know in the comments below.
This is a well-known fact that most of the automotive companies work on tight cash flow. Further, this business operates on a thin margin is something that puts businessmen in tremendous pressure to keep the sales up all the time.
Due to the competitive nature of this industry, the suppliers are piped to give their hard-working employees an incentive to get the client’s business. And these incentives, sometimes, turn out to be the cause of financial problems for the supplier. Moreover, change is the fickle nature of this game; if the business owner or automobile supplier is unable to keep up the pace in the market, they are either replaced or worse, shut! Thus, to keep with this nature, the suppliers and business owners require money.
But what are the options for an automotive business handler when it comes to financing? The tough and rigid system of banks is surely not getting the funds quickly. So where to turn.
Thankfully, there are alternatives everywhere, and this field is no different. Let’s have a look at them:
When the need for quick cash arises, the business owners turn to funding firms like Cresthill Capital/Mantis Funding.
Firms like Cresthill Capital/Mantis Funding understand the different requirements of the automotive business. They also understand the fact that the requirement of a supplier is different from that of a dealer, and a dealer might have a different set of requirements compared to that of an auto repair shop.
They don’t get bogged down by credit scores and their reports. With a super flexible way of returns, these firms are designed for the growth of the venture. Further, to strengthen their customer support, they have created platforms like Cresthill Capital Complaints, where the business owner can ask for help by writing about it and get a solution ASAP.
Seeking Help From Friends And Family:
This is a good option for raising money for the crunch situations. The benefit here is that the money stays within the family, and the repayment option is quite flexible. Moreover, asking from family solicits funds for short and long term may lead to a little squabble in the future, but due to its no interest nature, this is a good option.
Work In Different Ventures:
To complement the cash flow here, a businessman can look to work in different ventures which are not season or dependable and are sure to turn profits their way day in and day out. In this way, the businessman can complement the cash crunch in this field. Moreover, there will be no need to look for other funders.
Seeking Venture Capitalist:
Looking for a venture capitalist who trusts you is also a good idea. If established on a well-defined and visionary model that promises regular cash flow, the capitalist might get tempted to help you in managing your firm by providing some funds.
Seeking Financial Counselling:
Seeking out advisers for some good advice on your current situation can also be quite helpful. Talking to experts will help you gain a new perspective, which in turn can be used to devise a strategy for cutting costs, saving money where possible, and reducing debts. Furthermore, these counselors can help you recommend firms like Cresthill Capital/Mantis Funding, which can help you by providing funds for short-term use with flexible repayment options.
These are just a few ways of getting easy funds from a reliable institution. However, a businessman needs to understand how the finances are flowing and how they can cut down costs, which can be used for the smooth flowing of their business.
If you are stepping into the world of Alternative Online Lending for the first time, then all the information on the blogosphere can be quite confusing. Every company is advertising different types of offers or services, AND it's all couched in marketing-laced language that obscures the actual information. Therefore, to provide some clarity, here is a list of some must-know alternative lending terms here:–
1. APR (Annual Percentage Rate)
This is the most useful metric to compare different funding offers! Simply put, an APR is a calculation of how much a financing offer will cost you on a yearly rate. It includes all fees and costs and is followed by most alternative financing companies like Cresthill Capital.
2. Debt Service Coverage Ratio (DSCR)
A DSCR is the preferred criterion for online alternative lenders for evaluating a client’s creditworthiness. Debt Service Coverage Ratio (DSCR) is basically your total annual income divided by any current annual liabilities. If a DSCR is greater than 1, it means that you or your business is able to pay off its current financial obligations.
3. Merchant Cash Advance (MCA)
This is one of the most preferable financing options for small business owners. In an MCA, the money you receive from online lenders like Cresthill Capital is seen as an advance payment on your future earnings. The repayment is also made as a percentage of each sale made with a debit or credit card.
4. Line of Credit
This is another type of alternative lending option popular with SMEs. A line of credit (LoC) operates like a credit card with a limit that businesses can use as a steady stream of money. They withdraw and use what they need and only pay charges on the amount they use till it is repaid. As per some recent Cresthill Capital Reviews, this is one of the best finance options for those dealing in small and medium scale seasonal businesses.
5. ISO (Independent Sales Organization)
If you are looking for funds, then you will certainly encounter an ISO. ISO or an Independent Sales Organization is a third party company that works with small business owners by providing liaisoning merchant services. They act as the link between businesses looking for credit and Alt-fin organizations.
6. Invoice Financing
This is a great option for businesses, which are struggling with cash flow due to unpaid invoices. With invoice financing, you get a line of credit by pledging your unpaid invoices as collateral. A lending company like Cresthill Capital Reviews all the invoices closely as the size of the line of credit depends entirely on the value of your outstanding invoices. You are ultimately responsible for collecting the money from the companies who owe you, but through invoice financing, you now have the cash to meet your immediate obligations.
These are just a few of the terms that help in demystifying the world of alternative lending for you. Of course, there is more to know. For that, you may contact a trusted alt-fin expert or just simply get in touch with Crest Hill Capital at 800-828-0452 before you apply for your first financing offer.