What Is An Invoice Factoring Loan?

The business of getting small businesses loans has become highly regulated over the last few years. It is much more of a challenge to receive a traditional business loan from a bank than it was a few years ago. Now the requirements have been increased and make it challenging for any small business to get a loan. Some banks won’t even look at a company if they haven’t been a business for two years. That is why an invoice factoring loan was created.

The requirements for getting a business loan from a bank may seem simple on the surface.

Have good business credit and personal credit.
Have a solid management team in place for the business.
Been in business for two years or more (typically).
Present a strong business model and plan for your future.
Have a need for the funding with a detailed plan of how you plan to spend it to grow your business.
Have collateral to help secure the loan.

When you dive deeper into the requirements they are not easy to meet. You must have nearly perfect credit and your plan for the funding must be clean. The requirements may seem excessive to some but they are necessary to a bank. This is due to the intense regulations they are under to ensure they know their customers. That is why the concept of an invoice factoring loan was created through alternative funding providers. These providers have fewer regulations for those who don’t meet the requirements as opposed to a bank.

As a business owner, you hope that all of your clients pay on time. But we know that is not always the reality. Invoice factoring loans allow you to have access to the funds your clients would have given you, at a slight discount. This discount can range in percentage based on a number of factors including age of the invoice, when it will be paid off, and the credibility of the client.

Invoice factoring loans can be called a variety of names. Account receivable financing, payroll loans, the list can go on. Depending on your search criteria you will find the right funding for your business needs. This type of loan can be used to meet any business need because typically the lender cares more about making money than how you plan to spend it.

A merchant cash advance can be a great alternative to an invoice factoring loan because it doesn’t require giving up a percentage of your unpaid invoices. Instead, it focuses on your future credit card sales. At eBusiness, we have made our process automatic to withdraw your funds on a daily basis until the advance has been paid off. This is great for some business owners because they can focus on their business and less on remembering to pay one more bill.

What are the benefits of a merchant cash advance?

We don’t look at the length of your business history as a deciding factor.
- When we look at your business history our only requirement is that you have been in business for at least 6 months.
- We look at the future of your business. We don’t want to focus on your past and any mistakes.
- Small business funding is meant to grow a business that may be in its early stages, not prevent it from being able to grow because of requirements.
Quick Access to Cash
- We can get you approved for a cash advance in just 24 hours.
- Just three short days later we deposit the cash into your account.
No Collateral
- We are not going to ask for any collateral from you to secure the advance.