The number one problem with hunting for retail financing is the relative lack of lenders that offer full-suite solutions. You can always find separate prospective lenders for one or other of your financial needs, but rarely can you find a single one that meets them all. Diversifying your monthly payments is not efficient or beneficial – especially when it comes to loans.
However, with that said, it is still better to opt for better individual solutions than a full-suite lender with objectively more costly terms. The following are some retail financing options that have withstood the test of time in any economy.
Retail Financing Option: The Merchant Cash Advance
If you’re a small or medium-sized store owner with a limited history in business, it can hard to secure bank funding to meet your cash flow objectives. It is for this reason that the short-term loan option of the merchant cash advance is so widely used. The market is largely unregulated, which means it’s a lot easier to get approved.
The merchant cash advance option gives the lender a percentage of your daily or weekly receipts (credit card, usually). The benefit here is that, since it’s a percentage, you are never overburdened during seasons of low sales. The daily credit take for the lender averages 12.5%. The terms vary somewhat depending on the company and the option you choose – such as the daily ACH loan that looks at total sales over a period of time, instead of daily sales.
Equipment Loans and Leasing
This is probably the best option for those who need to purchase machinery, since it helps keep your cash flow positive for day-to-day operations. These rings even truer if you opt for equipment financing rather than buying outright; there are many advantages to leasing over owning. The cost is one; the ability to upgrade at minimal cost is another.
With retail financing, working capital is the name of the game – after all, seasons of heavy buying fluctuate, and you want to make sure you can remain solvent through a downturn. The above are just a few of the lending and leasing options that will help you accomplish this goal and stay in business while others are floundering. Contact Bold Growth Solutions for more information.
Contract financing is a form of assurance that significantly increases the chances that you secure a contract that you’ve been awarded by a consumer (usually a company). You may initially think “why would I need assurance if I’ve already been promised the contract?” Fact is, many contracts are lost due to the service provider’s inability to meet deadlines or requirements – particularly, proof of the necessary funds to see the project through. To hedge against this, it is possible – if not outright advisable – to secure a letter from a lender to the client of your ability to fund the project in full.
Finalizing the Funding Transfer and Beginning the Project
You can opt for a purchase order finance, in which the financial institution provides the funds with which you can then purchase materials and pay workers. In this case, the lender sends the funds directly to the supplier on your behalf. You will need a top-notch credit score, in most cases, to secure this type of contract funding – despite the fact that, in order to minimize the risk, your business does not actually control the funds.
Obtaining Partial Control of Funds for Your Business
In this scenario, you have full control over the contract financing; this is often a multi-step process. For example, as you meet preset milestones, more money will be released by the lending institution. If a project requires a total of $5 million in projected funds; then perhaps the lending company will provide you with $500,000 after the foundation is laid for a property extension or new office building. This tactic is usually indicative of smaller financing institutions, for obvious reasons.
Getting Total Control of Funds
The final and most robust situation for your company; in this one, all funds are released to you at the start of the project if they are approved. It can take the form of an overdraft or a direct business loan; in the latter, full payment back to the company is due at the conclusion of the project. Your credit must be virtually blameless to secure this option of contract financing.
Making a name for yourself on the internet can be an involved process. Many business owners learn early that selling services online requires a good amount of preliminary research and a ton of trial and error. While digital marketing can seem overwhelming at times, there are ways to find your center and keep forging ahead. One easy way to achieve this is by setting goals for your marketing campaigns. By having objectives you can work toward, you can totally transform your advertising experience. Use these points to learn more.
Create a Map
For many, running a business can often feel like wandering around in the dark. No matter what industry your company exists within, there is not always a clear path ahead. By setting goals for yourself, you can change this. A goal creates a finish line for you. Once you see where you’re headed, the rest of your journey starts to unfold before you. Until you have an idea of what you’d like to accomplish, however, you are pretty much just taking guesses without a purpose.
Obviously, there are some goals that are going to be too broad when it comes to digital marketing. The main goal is always to sell the services of your brand. Of course, you need to be a bit more specific than this. By being as detailed as possible with each goal you set, you will be able to create a plan that leaves less room for error. For example, you may wish to see higher conversion rates on your website. This goal is much more specific than stating you’d like to make more sales.
Set a Timer
A goal is not worth much without a time limit. When you’ve got no deadline before you, it can seem freeing at first. In truth, it can actually encourage you to take your time to the point where you never get started. Giving yourself hard deadlines with your goals ensures that you will actively take steps to accomplish what you’ve set out to do. While you definitely benefit from lighting a fire beneath you, it is also important to remain sensible and create manageable timelines with your goals.
The key to digital marketing is being as specific as you can. Take this to heart by setting clear and concise goals for your advertising strategy. When you put a finish line before you, it makes the rest of the process a whole lot easier for you to handle.
Healthcare practices should strongly consider the use of medical factoring to improve their working capital and cash flow; in fact, few industries could reap greater benefits from this financial instrument. In particular, the role of medical insurance often means very long delay times between the service provided and the receipt of payment for said services. Invoices can remain outstanding for as long as 120 days in some cases, which seriously stifles the healthcare company’s ability to grow.
Medical Factoring Offers Solutions to Unique Problems
Just like any business, the healthcare industry has to be concerned with the costs of everyday operation – this includes utilities and of course rent, payroll for employees, medical equipment, office renovations, the cost of their marketing plan and investments, and attorneys and consultants. The added cost of medical malpractice insurance can be burdensome if payments are not rolling in.
Top Reasons For Healthcare Factoring
In addition to the above, there are quite a few reasons why healthcare factoring is especially important for the medical industry; indeed, some of these are concerns that are exclusive:
Healthcare Reforms: Although regulations are a feature of every industry, healthcare is a special case due to the politics involved with Medicaid, Medicare, etc. All kinds of new initiatives emerge from Washington almost every year, and the medical industry needs to prepare to implement them financially.
Medical Malpractice Suits: This goes for any suit, of course; the costs associated with medical malpractice can be sky-high, and insurance is the only viable way to deal with it. A negative cash flow can be a death knell to getting full coverage, however – which is medical factoring can be of such utility in getting paid so as to have the necessary working capital.
Specialized Equipment: You cannot afford to fall behind in the equipment department – especially since there’s a direct correlation with the health of your patients. This means your older models need upgrades and renovations; sometimes, they need to be replaced.
In sum, then, the reason why healthcare practices employ medical factoring is to facilitate a business that is especially prone to cash shortages, due to the nature of medical insurance (primarily).
Starting a new business or expanding your business costs money and one of the biggest challenges facing business owners is getting the money they need. The business financing landscape is large and it’s hard to find the right method without some major research. One option that many businesses choose to cover everyday expenses is a working capital loan.
Working Capital Loans Explained
Loans are typically categorized based on what they are going to be used for. A working capital loan is used to fund the day-to-day operations of a business. They are often used for payroll, debt payments, and rent. They can also be used by the business during the slow season to cover immediate expenses.
A cash flow loan has some similarities to working capital loans, but are approved based on the past and future cash flow projections for your business. You typically don’t have to put up any collateral and the approval process takes just a few hours. This is a very flexible option compared to some of the other business funding options. However, you’ll want to be sure that you’re aware of the interest rate (often high) and be sure that you and your attorney read through the agreements before you sign.
Who Provides Working Capital Loans ?
While there are some banks that offer working capital loans, you’ll typically find an online provider offering the best terms and easy qualifications. A bank will usually have a much more stringent approval process to go through and you’re less likely to get a quick approval.
How to Increase Your Working Capital
The term “working capital” refers to when your assets are greater than your liabilities. If you want to increase your working capital, there are a few options:
Sell long-term assets
Replace short-term with long-term debt
Choose vendors that offer discounts
Analyze fixed versus variable costs
Learn about tax incentives
Keep financials current
Many businesses struggle with increasing their working capital. If you’ve exhausted all of the above options for increasing yours, it might be time to consider looking at working capital loans. When you decide that you want to explore these options, contact Bold Growth Solutions to help.
When you are investing in real estate, acquiring the necessary funding can be difficult. One way that many professionals deal with this is to take out a hard money loan. This is a short-term loan that acts as an alternative funding method to obtaining a mortgage. However, there are advantages and disadvantages to using hard money.
The advantages include speed, flexibility, and approval. To get a hard money loan, you are required to put up collateral. For this reason, you can generally get a hard money loan much quicker than any other type of loan. You are seen as low risk to the lender because the collateral is sold in the event you can’t pay them back.
You will also find that you have more flexibility when it comes to how you use money from the loan. In some cases, you can set your own schedule for repayment, something other loan types don’t offer. Add this to the fact that it is generally easy to get approved for this type of loan, and you will be well on your way to having the money you need.
When To Use One
A hard money loan is most often used when you need financing to flip houses. Yet it can be used to purchase a house you intend to live in. Most people that start with a hard money loan renegotiate the deal once they’ve bought the house.
The main disadvantage of taking a hard money loan is that you will pay higher interest rates on it than you would on other types of loans. The lender may require you to cover the closing costs of the house you are buying, even if you intend to fix it up and sell it. Another disadvantage is, because it is a short term loan, it can drain your finances in the long run. Generally, the higher the value of the property you are buying, the more money the loan is going to cost you.
For more information on the advantages and disadvantages of hard money loans, please contact Bold Growth Solutions.