Cannot Get Venture Capital? Look At These Two Options By Marco Terry At Isnare.com Ezine Articles

Many business owners try to finance their growing businesses by going to venture capital or angel funding groups. Although both financing options provide a great way to finance a business, they are usually hard to qualify for. And furthermore, they all require that you give up some business equity in exchange for funds. That, needless to say, can be a very steep price to pay.

There are some business financing alternatives that can allow you to finance your business, almost as effectively, without having to give up any equity. As opposed to venture funding or angel funding, these options are easy to qualify for and do not require the endless documentation and due diligence that venture money requires..

However, these can only help you if you meet the following criteria:

1. Your business is established and has commercial (not consumer) clients
2. Your business invoices between $40K and $900K per month

These alternatives will help you if:

1. You need money to meet payroll, pay rent or pay suppliers
2. Your customers pay you in 15 to 60 days
3. You need (or wish) your customers to pay you sooner

Your first option is called factoring (also known as invoice factoring). Factoring is ideal for businesses that cannot afford to wait 15 to 60 days to get paid by their clients. Factoring provides you with financing that is tied to your invoicing. Basically, the more your company invoices, the more financing you qualify for. This enables you to grow your company – many times exponentially – without having to give up equity.

Your second option is called purchase order financing. It works well for re-sellers, distributors, traders and wholesalers. Purchase order financing is ideal for business owners that have a large purchase order in hand, and who cannot afford to pay their suppliers to deliver the product. PO financing enables you to get a letter of credit, backed by the financing company, to pay your suppliers. This allows you to deliver on the purchase order and effectively make the sale. Usually, very little – if any – of your money is required for the transaction.

Both alternatives are easy to qualify for, take days (or a couple of weeks at most) to set up, and when used correctly allow you to grow your company exponentially.

Published At: Isnare Free Articles Directory http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=44514&ca=Business

Important Notice DISCLAIMER: All information, content, and data in this article are sole opinions and/or findings of the individual user or organization that registered and submitted this article at Isnare.com without any fee. The article is strictly for educational or entertainment purposes only and should not be used in any way, implemented or applied without consultation from a professional. We at Isnare.com do not, in anyway, contribute or include our own findings, facts and opinions in any articles presented in this site. Publishing this article does not constitute Isnare.com's support or sponsorship for this article. Isnare.com is an article publishing service. Please read our Terms of Service for more information.