What are the best alternative lending options?
The top alternative lending options are a merchant cash advance (MCA) and invoice factoring. While both working capital products provide liquidity quickly, the mechanisms in which funding amounts are determined and approved differ.
For an MCA, a company sells a portion of their future sales in exchange for immediate working capital. A business that has at least $10,000 in monthly revenues can be approved for a merchant cash advance in a matter of hours!
A bank that offers invoice factoring will buy outstanding invoices at a slightly discounted rate to their collectable value. When a factoring company factors a company’s invoices, it provides your company working capital well before the invoice is due, and the factoring company will collect on the invoice from the customer directly.
Merchant cash advance: sell your future sales for cash today.
The main benefit of alternative funding is that it is far more accessible to businesses than traditional bank loans. Most companies can qualify for an MCA if they have over $10,000 in monthly sales or revenue. A businesses’ credit score is not strongly considered in the application process. Instead, MCA companies look at your bank statements, and fund companies with strong sales. A company that is approved for an MCA is effectively selling their future sales today for instant working capital available for use within hours.
Invoice Factoring, leverage your invoices for working capital.
Certain industries have invoices that recur on a monthly or quarterly basis from highly verified customers. A factoring company will evaluate a business’s sales, as well as the customers they sell too. When approved for invoice factoring, the factoring company will purchase invoices at a slightly discounted rate with a small fee. The factoring company will then deposit the working capital to the business and collect on the invoice directly from your customers. This influx of capital can then be used to cover payroll or handle day-to-day expenses.
How to apply for alternative financing?
CFG Merchant Solutions offers a wide range of alternative funding options. Apply via our live chat or one of the forms on our website, and we will get you funded within hours!