How to get the best SME funding solution there is?

4 Min Read

It doesn’t matter whether you are just starting out on a business or have already been in one as a small business owner you would have to face the situations where immediate funding is required. Many business owners might consider taking a traditional loan as the ultimate solution there is but as a matter of fact, many banks might just not be interested in helping these small business owners whatsoever. These are various financing options that are valid for small and medium business enterprises, however, if you want something more customized package that can be exactly cut out to your individual needs then the merchant cash advance UK is the best option you can go for and engage in better business practices.

There is another mix in there; suppose you reach a dedicated point where you are unable to meet the certain criteria set by the bank or the lending authority then you would soon be out of the business. But if you don’t want to put any of your assets or property at risk or jeopardy then there are other alternative solutions that you must be pursuing starting from;

  1. Asset-based lending

This includes lending some of your assets to the lending authority that you would be able to procure just right back when you have cleared all the payment. In some situations, your business would even be used as an asset that is taken under the wing of the bank for the sake of providing you with a loan. Small installments are made that are paid monthly and duration is settled during which that loan has to be returned for the sake of that asset to be released and given back into your custody.

  1. Lines of credit

This is the type of lending solution that pays for short term expenses for the businesses such as purchasing the equipment, expanding the inventory, covering operational costs, and other such. Lines of credit works just as a credit card works, there would be sufficient funds for you that would allow you to purchase inventory or make certain financial transactions up to a limit, just how it happens with a credit card. Once you have returned the cash that you owe to the lines of credit the balanced would be renewed for a second run.

  1. Invoice factoring

This type of financing is extremely potent for the B2B businesses that are buying in bulk and selling all of these items to other businesses. In this type of financing, the invoices are issued to the end customers and sales copies are sent back to the lender. After receiving the invoice copies the lender would pay a percentage of the invoice value to the company. After everything is paid in full by the clients the lender would pay the remainder of the invoice back to the company after deducting a few fees applicable to the transaction.

  1. Merchant cash advance

This type of financing can be secured when a lender has inspected the dedicated cash flow of the company and verifies a steady positive flow of money rolling in. The funding would or can also be secured by future credit card transactions making it smarter to go with this option rather than pursuing other business-related loans.

Share This Article