It’s true that sometimes businesses need working capital solutions for their survival. Maybe the company is facing a large tax bill. Or, due to slowing paying customers they have gotten behind on their own bills.
But you aren’t in trouble. Not even close. In fact, your company is on the verge of something BIG! Maybe you’re looking to acquire a competitor which will increase your business tenfold. Or, you’ve acquired a new client and need more employees to take things to the next level. Your next step is a positive one, signaling growth and progress. But, you need capital to make it happen.
You are looking at opportunity!
Factoring can provide the capital so you can seize your opportunity and make things happen. With factoring, you can leverage your own money to capitalize on this next step without incurring debt or relinquishing a stake in your company to a new investor. Working capital solutions can be a great option for positive changes in your company’s progress. With factoring, you’re simply reducing the amount of time you wait on your customers to pay. With the cash in hand faster, you can fund progress yourself.
When looking at funding through a traditional bank loan, there are several points to weigh. First, there are requirements you’ll need to meet. Do you have reviewed or audited financials? Have you been in business for two years and profitable? Are you willing to wait weeks to get setup with a bank? How fast could the bank increase your current credit line? Next, you incur the debt. This means your credit will be affected. Then you’ll need to consider how you’ll pay that loan back. Can you count on the capital every month to make the minimum payments every month, on time? Then, consider that the loan you receive will be a fixed amount based on your current state of business; it’s not flexible based on your growth and other changes in your business.
Factoring is not a loan, so there’s no negative impact on your credit. In some instances, your credit score can improve because with a consistent cash flow you are able to pay your own bills quickly and timely. Next, because factoring is not a loan, there’s not a lump sum you must pay back and no monthly payments. Factoring simply offers fast access to your money based on your accounts receivables. Therefore, as your business grows, your factoring line has the flexibility to adjust with the changes in your business.
Businesses sometimes turn to an outside investor for a capital injection in order to take advantage of an opportunity. In some cases, this is a great option. You may be bringing in an investor that has some expertise in your field and can provide more than just cash. However, one thing to remember is usually this option requires relinquishing a portion of ownership. That can be a tough pill to swallow for some entrepreneurs; possibly losing some decision-making abilities and also losing interest in the company itself. Factoring does not involve any ownership stakes. The owner or owners retain full ownership of the business.
Knowledge is power. When you see opportunity, have the power to take control and capitalize!
Call Porter Capital today at 205.322.5442 to learn if factoring is the right tool to help you meet your goals.