Across the business landscape, time is of the essence. Yet while transactions are moving faster to meet the needs of clients, the one thing that seems to take much longer is approval for financing. Fast funding is almost an oxymoron in the financing arena. However, the approval rates and availability of funds do vary greatly between major financing solutions, so we’re going to take a look at the most popular forms of businesses financing and break them down for you.
Business loans can be used for a wide range of purposes, such as equipment, commercial real estate, and more. Business loans work exactly as you’d expect in that entrepreneurs put up collateral and take on debt in order to get the financing they need. What is rarely discussed is that interest rates on business loans can fluctuate with the mandates of the Federal Reserve, and the requirements for borrowers have been steadily increasing for the past decade, making traditional loans less accessible to small business owners. Additionally, business loans use a “chain of command” process, by which loan applications are passed from department to department, often resulting in delays. In terms of fast funding, traditional loans come in with closing that can take several weeks.
Merchant Cash Advances
In comparison to traditional business loans, merchant cash advances can be arranged in a much shorter period of time. Merchant cash advances offer discretionary capital which is provided against future sales. Merchant cash advances are structured around the sales history of a business, which can put newer or smaller organizations at a disadvantage. Merchant Cash Advances also come with hidden fees, and because most of the risk is assumed by the lender, the interest rates are much higher than even traditional business loans. While merchant cash advances provide fast funding compared to traditional lending channels, businesses usually have to wait 10 days or longer to get access to funds.
Factoring Offers Fast Funding
When businesses need fast funding, factoring offers a solution. Factoring provides capital in exchange for unpaid receivables, and funds are made available within a single day. One of the biggest reasons businesses seek additional financing is because revenue is tied up in unpaid invoices with staggered schedules, and factoring unlocks that revenue. Factoring is not a loan, so there is no debt, and businesses get to preserve their credit ratings.
New Century Financial provides fast funding by offering the most complete and comprehensive factoring services for businesses. We make funds available within 24 hours, and we let businesses control which invoices or parts of invoices are factored. There are no long-term contracts and no hidden fees. Contact New Century Financial today and get the funding you need, when you need it.