Photo Credit : kenteegardin/Flickr

Photo Credit : kenteegardin/Flickr

Bank loans remain unattractive for businesses. The National Federation of Independent Business, the Kauffman Foundation and the Small Business Administration have released reports in the past few months detailing the problems that business owners have with securing loans with banks.

The issue is always the same: companies were hit hard by the recession of 2008, which in turn hurt their credit. This, combined with stricter regulations have made business owners either unable to have bank loans approved or have made them reluctant to pursue loans in the first place.

It’s important then, to consider the alternatives.

As early as April of last year, Forbes reported on potential alternatives to bank loans- named invoice factoring. Cheryl Connor, a contributor for Forbes, noted the benefits provided by utilizing factoring. “The safeguards are increasing and the astronomical costs are abating as the market for these innovative lending sources continues to grow. Even the “loan shark” reputation is decreasing, experts note, as mainstream organizations such as eBay, Amazon and AmEx OpenExchange are now getting into the alternative merchant financing act,” reported Connor.

Moreover, Connor also pointed out that the invoicing factoring sector of business was increasing in size by nearly double digits, and that, “The Green Sheet estimates the market for merchant cash advances is currently $500-$700 million, with the potential to reach $3-5 billion within the next several years.”

The growth of both loan services and invoice factoring demonstrate a clear sign among business owners that banks should no longer be the sole option for capital. What business owners should consider however, are the benefits offered by versatile companies such as Capital Solutions Inc. versus other companies focused solely on loans.

One can take for example, the recent service provided by OnDeck Capital which offers to provide a $50,000-$250,000 loan in 24 hours that can possibly be repaid over the course of two years. While faster to secure than a bank loan, the OnDeck Capital loan requires that the business has been around for at least three years and is bringing in at least $100,000 each month. Moreover, the annual percentage rates on the loan range from 19.99 to 39.99 percent.

Capital Solutions is a one-stop shop for three kinds of lending: invoice factoring, asset-based loans, and purchase-order financing.

With invoice factoring, Capital Solutions can advance up to 80–90% of the invoice prior to the customer paying so that business owner can use those funds at his or her discretion. Purchase-order financing is a great choice for businesses that have orders ready to fulfil, but lack the cash flow to pay the supplier up front. Finally, Capital Solutions also offers asset-based loans. Asset-based loans are more difficult to qualify for than factoring, but decisions can be made faster and issues resolved sooner than securing a loan through a bank.

For more information on any of the financing options offered by Capital Solutions, Inc., call 1-800-901-3299 or click on the Contact Us tab and fill out the necessary information.