subject: Attain Business Perfection With The Strategy Of Business Receivable Factoring [print this page] The desire to attain and bring out the best in shortest time has leaded the businesses to opt for various new strategies for their business. The old and conventional business loans provides an option full of hassles and take a very long time and the various requirements for the fulfillment of the working capital, creates a lot of trouble for the merchants. The various hassles of the business loans are mentioned below, which might hamper the normal business routine are:
You might have to wait for months before the final approval for the business loans is received. The emergency requirement of the business can never be fulfilled by the traditional business loans.
If your business firm have poor credit score, your business loan might get rejected.
The repayment is done through a fixed installment amount that is to be paid, within a specified period of time. Any delay may invite penalty or other charges.
You will have to pay hidden charges, for which there is no details provided to you or your prior knowledge.
You will have to pay expenses through application fees, start up fees or closing fees as per the guidelines. These expenses might dig huge holes in your pocket, thereby creating problems with the normal day to day fund management.
There are requirements of heavy security collateral and personal guarantee, which you will have to provide prior to approval of the loans.
The rejection rate is as high as 90% in certain cases of the business loans.
You will have to spend the funds as per the instructions provided. No flexibility is provided.
You are thinking for a bailout from this scenario. Avail the smartest business finance strategy with the business receivable factoring. By the business receivable factoring we understand the processing of the future electronic receipts of the merchant generated through sales and through this the money lending company can access a small fixed percentage of money from the sales. it is an unexplored area of financing where a lot of benefits can be generated from business receivable factoring for the benefit of the business units. The various types of the business receivable factoring that help in the financing of business units is explained as below:
Lock Box or Trust Bank Account- In the lock box and the bank account type of business receivable factoring, the money generated through sales is deposited in the bank account of the finance provider and the share of the business unit is then extended by ACH, EFT or wire.
ACH Withholding: in this type of business receivable factoring the business factoring company only receives the information in relation to the credit card financing; the percentage of money is then deducted via ACH through the business account.
Split Withholding: this is one of the most popular and beneficial method of business receivable factoring, in which the agreed percentage of sales is split between the merchant and the business receivable factoring provider, thereby helping the generation of revenue for both the units.
