There are two types of invoice financing: traditional invoice factoring and invoice discounting. Traditional factoring offers larger amounts of capital, but it is also costlier, and you have to be OK with the factor contacting your customers. Invoice discounting provides smaller amounts of capital but at lower rates, and it doesn’t require client contact. The…
About the Author
Dennis Shirshikov
Dennis Shirshikov is Fit Small Business’ authority on small business financing. His work has been featured in USA Today, the Wall Street Journal, Huffington Post, Business Insider, and Bloomberg. He has a Masters in Risk Management with an emphasis on Financial Modeling. When not working with small businesses, Dennis teaches Economics at Queens College.
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What Is Maturity Factoring?
Maturity factoring offers small business owners an opportunity to get paid the value of receivables by the factoring company on the maturity date, which may be on or after the invoice due date. Both parties can agree to an alternative date; however, unlike traditional factoring, maturity factoring does not offer immediate funding. How Maturity Factoring…
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What Is Days Beyond Terms?
Days beyond terms (DBT) is the number of days a business takes to pay its bills past the corresponding due date. Lenders use this metric as a proxy for the financial health of a business’s receivables. In invoice factoring, DBT plays a large role in the rate that a business receives on financing. Why Days…
What a Factoring Reserve Account Is
The factoring reserve is the amount a factoring company holds in reserve until a debtor pays the invoice. Once the debtor pays the invoice, the factoring company pays the reserve—or rebate—to the business that sold its invoice to the factoring company. The factoring company keeps a percentage, called the factoring rate, which is its fee…
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7 Best Small Business Lines of Credit 2020
Business owners use small business lines of credit (LOCs) for short-term working capital needs because they can borrow funds repeatedly. The best small business lines of credit are unsecured, meaning there is no collateral like inventory or real estate. Some of the best business LOC providers can fund up to $250,000 the same day. 7…
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5 Best Unsecured Business Loans 2020
Some business owners can’t or don’t want to pledge specific assets—personal or business—as security for a business loan. Many traditional lenders require business loans to be supported by collateral, such as real estate or equipment. The best unsecured business loans offer large amounts of funding—quickly—with easy-to-meet qualifications. Top 5 Unsecured Business Loans How We Evaluated…
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8 Best Alternative Business Loans
Alternative business loans offer flexible credit requirements, easy online applications, and quick access to funds for small business owners that don’t qualify for traditional financing. Alternative business funding encompasses several financing solutions, including short-term working capital, long-term equipment, inventory, and real estate financing. 8 Alternative Business Funding Options 1. Short-term Business Loans Short-term business loans…
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Rollover for Business Startups (ROBS): The Ultimate Guide
A rollover for business startups (ROBS) allows you to invest retirement funds from a 401(k) or individual retirement account (IRA) into your business without paying early withdrawal penalties or taxes. A ROBS isn’t a business loan or a 401(k) loan, so there’s no debt to repay or interest payments to make. Most small business owners…
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5 Best Rollover for Business Startups (ROBS) Providers 2020
A rollover for business startups (ROBS) is a financing solution that lets you start or purchase a business with your retirement savings without paying early withdrawal fees or tax penalties. These transactions are difficult and confusing, which is why we recommend using an experienced ROBS provider. We’ve compared the best ROBS providers for startup businesses….
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BlueVine vs Fundbox: Costs, Terms & Which Is Best
BlueVine, an invoice factoring provider, offers business owners the opportunity to sell their invoices at a discount to receive funding up to $5 million. Fundbox offers business owners a line of credit up to $100,000 with easier-to-meet requirements. BlueVine is the best overall option because it offers invoice factoring in addition to short-term loans and…
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10 Ways to Solve Business Cash Flow Problems
Cash flow problems arise when businesses cannot cover debt payments, payroll expenses, or inventory restocking. Many cash flow problems are temporary and pose a serious threat only if they become chronic. Cash flow solutions include financing, for temporary issues like growth or inventory, and managerial, for chronic cash flow problems. OnDeck, which sponsored this article,…
5 Best Business Loans for Bad Credit 2020
Half of all business owners don’t qualify for traditional business loans because they have bad credit scores, according to the Federal Reserve. Online lenders offer small business loans to borrowers with credit scores of 600 and lower, but these bad credit business loans carry high overall costs. Top 5 Bad Credit Business Loans How We…
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