COMMERCIAL LOANS

For businesses that need working capital, a commercial loan is always an option to consider. Having healthy cash flow is essential for any business, and a commercial loan can help you purchase essential inventory and invest in marketing. A loan might also help you survive lean times when not much cash is flowing in. The realm of commercial finance, however, is often difficult to navigate and it’s not always easy to get the funding you need. Issues such as your personal credit and the length of time you’ve been in business can make it hard to get a business loan. One alternative type of financing to consider is invoice factoring.

Invoice Factoring: An Alternative to Traditional Commercial Loans

With a conventional commercial loan, a bank lends you money and you pay it back with interest. Invoice factoring works a little differently. In this case, the factoring company buys your accounts receivable. This isn’t credit in the usual sense because the money you receive is based on actual invoices that are owed to you. The invoice factoring company in this scenario is more interested in the credit rating of your customers than yours because they’ll be collecting the invoices in the future.

The amount of money you can get from invoice factoring depends on what is owed to you. You can also choose how many customer invoices you want to submit for factoring. This is an efficient system that lets businesses enjoy better cash flow in exchange for paying a fee to the factoring company. If you think invoice factoring might be a viable solution for you, one of the oldest and most reliable factoring companies is Riviera Finance.