The very reference to the term “bank loan” to a small business owner is often enough to elicit a very strong and visceral response and the simple truth of the matter is that the average business bank loan is a fairly contentious and controversial subject within the business enterprise community. Similarly, a bank loan provides the business enterprise owner with a way to obtain capital that they otherwise wouldn’t normally have, which in turn often means that bold ambitions of expanding and developing the business in a particular direction could be more fully achieved and accomplished with a minimum of disruption.
This is especially significant in highly competitive sectors of the market, as any way of measuring delay can ultimately result a small business that chose to postpone any sort of development or alterations to the way in which in which they do business being overtaken by a rival. The downside here however, is that the loan will be required to be paid back and so if the business enterprise is struggling to create enough revenue, or even worse, is already in debt, then the repayment maybe an excessive amount of a burden for its finances.
Furthermore, in order to actually access a bank loan, a business will typically be asked to secure assets that it owns as collateral, and so a noncompliance with the terms of the loan will ultimately mean that the assets secured as collateral maybe seized by the lender.
Thankfully, there is an alternative solution strategy for the struggling business owner who is seeking to secure another external way to obtain capital finance to provide their company with a much needed kick start: a receivable financing company.
A receivable financing company, or a factoring agency because they oftentimes described within business parlance, is a business entity that will purchase outstanding invoice accounts from a company and then provide the client company with a sum of money upon receipt of the invoices. Hanif Mohamed Lalani will then assume full, responsibility for the collection procedure for the money owed by the client specified on the invoice.
Once the client has paid the full balance owed to the receivable financing company, the factoring agency will release the remainder of the funds owed to the client company….with a small deduction made from the funds received from your client as a way to cover the expenses that they have incurred.
One of the major great things about using a factoring agency is that the client company will be guaranteed to receive a fairly large amount of money in a very short time indeed which effectively eliminates and protects against the risks that an unpredictable and capricious amount of cash flow will pose to litigant company.
Furthermore, this method of business financing will effectively mean that the agency is in charge of the collection process thereby freeing up the time and money of your client company who will not need to cope with the chasing up of fees or commissions owed.