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Demystifying Business Financing

Updated: Jun 13, 2023

Generally, everyone is familiar with traditional bank or credit union loans, but many other sources of business capital are available. Traditional banks are a good option if your business has top credit, a long operating history, plenty of asset collateral, in an ‘accepted’ industry and reporting a profit. But, what if your business doesn’t meet any of these qualifications? In today’s world many forms of alternative credit are available for business, such as:

  • Business Credit Cards

  • Trade Credit

  • Equipment Leasing/Credit

  • Asset Based Financing

  • Accounts Receivable or Invoice Credit

  • Inventory Financing

  • Customer Purchase Order Financing

  • Unsecured Line of Credit

  • Working Capital Financing

  • Merchant Cash Advance

  • Small Business Administration Loans

Since many of these alternative financing options are private investors, they are typically more expensive than traditional bank financing but will close and fund much quicker and often have more flexible terms. Most importantly, and I always remind business owners of this, you get access to cash that did not exist before to infuse into your business. Knowing which financing alternative is best for you requires an understanding of your business, capital structure and financing need. It is recommended that you consult with your CPA or financial professional to insure you are selecting the correct financing path for your business.

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