One of the most common forms of business financing is Revenue-Based Funding, a program in which money is provided to a company in exchange for a percentage of future revenues. This is a great option for businesses who are already generating income, but don’t have the hard assets generally required for a traditional bank loan. Funding amounts can range from $10,000 to $2,000,000 based on your company’s monthly gross business revenue.
A line of credit that can be drawn against as often as once a day for anything your business needs to grow, pay for only what you take. One of the most common uses for a business line of credit is to help maintain cash flow, at some point all businesses will experience some degree of cash flow problems. There are unexpected circumstances that arise that can put even the strongest of small businesses into a cash flow crunch such as customers who are slow to pay their bills, a sudden drop in sales, a recent influx of new employees ( which means additional payroll) or unexpected expenses. Whatever the reason, it’s normal for businesses to occasionally have urgent short – term needs for additional cash.
A maximum credit limit is established and companies can borrow as little or as much as needed up to that limit. Payments on the line of credit would generally be made on a monthly basis. This is a good funding option for small businesses who require financial flexibility to meet short-term needs.
Obtaining financing through term loans is one of the most traditional funding options for established small businesses. These loans generally carry fixed interest rates and monthly repayment schedules which are based on the company’s revenue.
Most often, they’re used to finance inventory purchases, capital improvements, new construction and acquisition of large equipment and machinery. They can also be used to consolidate existing short debt to ease constraints on cash flow.
For many businesses, rates can start at 5.49% on loan amounts ranging from $25,000 to $500,000 with a fixed monthly payment over a 1 to 5 year period.
Receivables factoring is a good way for companies to receive money without assuming any debt. The funds are unrestricted, providing a company more flexibility than with a traditional bank loan.
The way it works is you are paid for invoices for service and products that have already been completed and delivered. BrookeVale Funding advances money to the business as a form of a loan that uses a security interest in the company’s accounts receivables as collateral. Loan amounts are determined as a percentage of the invoices full amount. The advance rate is usually 80% to 95% of the total face value of the invoices.
Factoring in Five Simple Steps
You perform a service for your customer.
You send your invoice to BVF for factoring.
You receive a cash advance on your invoice from the BVF Group.
The BVF Group collects full payment from your customer.
The BVF Group pays you the rest of your invoice amount, minus a fee.
Advantages of Factoring?
There are several reasons why factoring is a valuable financial tool for many businesses. The key benefit is that factoring provides a quick boost to your cash flow. The BVF Group can provide cash on your accounts receivable within 24 hours. This can solve short-‐term cash flow issues and help fuel the growth of your business. The BVF Group handles your customer collections, and may also evaluate your customers’ credit and payment histories. Benefits include:
Factoring can be customized and managed so that it provides necessary capital when your company needs it.
The financing does not show up on your balance sheet as debt.
Factoring is based on the quality of your customers’ credit, not your own credit or business history.
Factoring provides a line of credit based on sales, not your company’s net worth.
Unlike a conventional loan, factoring has no limit to the amount of financing.
Factoring aligns well with start-‐up businesses that need immediate cash flow.
SBA Bridge Loans are a smart solution for helping you obtain an SBA Loan for your business. Our SBA Bridge Loan Program assists in resolving obstacles that come up during the SBA approval process. Many times once the bank has approved the loan request, and obtained an SBA guarantee,
the SBA guarantee authorization may include certain requirements be met before the bank can fund the loan. This could include paying past due taxes, vendors and suppliers, or satisfying a judgment so that a lien can be released. A business owner can utilize our program to access capital to resolve the outstanding issues and receive a reduced payoff when the SBA loan is closed.
The SBA Bridge Loan can also be used as financing for day-‐to-‐day management of your business during the SBA process.
Advantages of Our SBA Bridge Loan
Financing is calculated from gross sales and business cash flow.
Fixed automated repayment allows for simple repayment and cash flow management.
Not collateralized against fixed assets.
Allow you to maximize available capital while protecting your margins and cash flow.
Businesses Seek SBA Bridge Loans for a Variety of Reasons
Pay off tax liens or other SBA loan obstacles.
Replenish cash reserves depleted by costs associated with the SBA process.
Manage day-‐to-‐day business expenses during the SBA process.