Can’t qualify for a business loan? Don’t worry. Consider these easy to qualify options.
After weeks of answering questions, providing endless financial statements, and playing the “hurry up and wait” game, you find out that your banker is unwilling to give you a business loan.
Now what? Do you go to another bank and try again? Possibly. But most banks have similar lending criteria. If you did not qualify for a loan at one bank, your chances are not fair that you will be eligible for a loan at another place. However, it doesn’t hurt to try.
However, other financing products are easy to obtain – and in some instances – work better than a business loan. Here is a straightforward quiz:
Does your business:
- Have commercial customers?
- Invoice at least $10,000 a month?
Is your most significant challenge:
- Waiting up to 60 days to get paid by clients?
- Paying suppliers?
- Meeting payroll?
If this describes you, then you could be the right candidate for either factoring or purchase order financing. As opposed to bank loans, these two financial alternatives are easy to qualify. An essential requirement is that you do business with healthy commercial customers, such as big companies or the government.
Factoring is ideal for business owners that cannot afford to wait up to 60 days to get paid for their invoices. Factoring provides you invoice based financing, giving you the money you need to pay rent, suppliers, and meet payroll. As opposed to bank loans, factoring has no upper limits. The amount of money you get is based on your invoicing. The more you invoice, the more financing you qualify.
Purchase order financing is ideal for distributors, wholesalers, and resellers that have large purchase orders that they cannot afford to fulfil. Under a purchase order financing arrangement, the financing company pays your suppliers on your behalf and helps ensure proper shipping of the goods. The transaction is settled once you invoice your customer and they pay.
Both factoring and purchase order financing can provide you with the financing you need to take your business to the next level.