altLINE is a financial service platform created by The Southern Bank Company that offers small businesses with alternative lines of credit, such as invoice factoring. We compiled information from around the web to give details on altLINE’s alternative lines of credit, and researched the fees associated with their services.
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How Does It Work?
Businesses usually seek the help of banks and other financial institutions when they need to take out a loan. However, not all companies are approved for loans the traditional way. This is where altLINE’s invoice factoring services come into play.
As a business, you receive payment for any product sold or service rendered. However, not all payments are upfront. Sometimes, when a customer purchases a product or service, the business sends out an invoice which is payable in the near future. If you require the money today, but your customer is expected to pay in a month, you can submit those unpaid invoices to a factoring service such as altLINE.
Unlike traditional lines of credit, altLINE checks the credit score of the customers of a business instead of the business itself. altLINE only accepts invoices that have a due date of up to 90 days, and only approves those businesses that are factoring at least $30,000 per month. If a business has an off month, and factors less than $30,000, they will be charged an additional $500 fee.
Once altLINE receives the invoice, the business can get up to 80-90% of the invoice amount on day one, instead of waiting for the customer to pay. Once the customer does pay, it goes directly to altLINE. altLINE then sends the remaining 10-20% balance to the business, minus the factoring fee.
Who Is It Right For?
The service is perfect for start-up businesses who lack the creditworthiness to take out a traditional loan. Most loans require businesses to be in the industry for at least 1-2 years, have a healthy credit score and make a certain amount of income annually. Many small businesses don’t pass these requirements and are therefore turned down.
With invoice factoring, it doesn’t matter how new your business is or how much you’re making. Any unpaid invoice, as long as it passes altLINE’s requirements, can be turned into ready cash for the business. For this reason, the service is beneficial for businesses who may have undergone some rough months, resulting in bad credit.
Invoice factoring is also good for businesses that tend to have delayed or stalled payments from customers. With invoice factoring, you don’t have to wait for customers to pay – you can submit the invoice to altLINE on the same day it is created.
altLINE allows small business to submit unpaid invoices in exchange for quick cash funding. The service has a minimum monthly factoring amount of $30,000, but it can lend up to $5,000,000. Any customer invoice submitted for factoring must have a payment due date of less than 90 days. altLINE sends 80-90% of the invoice amount in advance after processing the invoice, which usually happens within 24 hours of invoice submission.
The discount rate for invoice factoring is 0.5% – 5% per invoice. The shorter the due date on the invoice, and the larger the factored amount, the better the discount rate. They charge up to $500 on their origination fee. You must factor at least $30,000 in a month, or you will be charged with a $500 fine.
altLINE performs credit checks on a company’s customers to minimize the risk of non-payment. However, if a customer fails to pay, altLINE employs the recourse factoring method. This means that aside from asking for a personal guarantee upon applying, the service also holds the small business liable for a customer non-payment. So aside from not receiving the rest of the factored amount, the business has to buy back the invoice advance amount, meaning they have to give back the advance that they received.