Great Ways to Finance Your Business

Finding financing or startup financing in any economic climate can be challenging, whether you’re looking for start-up funds, capital to expand or money to hold on through the tough times.

But given our current state of affairs, securing funds is as tough as ever. To help you find the money you need, we’ve compiled a guide on 10 financing techniques and what you should know when pursuing them.

Consider Factoring

Factoring is a finance method where a company sells its receivables at a discount to get cash up-front. It’s often used by companies with poor credit or by businesses such as apparel manufacturers, which have to fill orders long before they get paid.

However, it’s an expensive way to raise funds. Companies selling receivables generally pay a fee that’s a percentage of the total amount. If you pay a 2 percent fee to get funds 30 days in advance, it’s equivalent to an annual interest rate of about 24 percent.

For that reason, the business has gotten a bad reputation over the years. That said, the economic downturn has forced companies to look to alternative financing methods and companies like The Receivables Exchange are trying to make factoring more competitive. The exchange allows companies to offer their receivables to dozens of factoring companies at once

Get a Bank Loan

Lending standards have gotten much stricter, but banks such as J.P. Morgan Chase and Bank of America have earmarked additional funds for small business lending. So why not apply?

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