Construction factoring is a financing option for businesses in the construction industry. Instead of delaying work because of slow-paying clients, factoring allows your business to forge ahead, taking on more and larger projects. We examined eight construction invoice factoring companies and compiled our list of the six best for small business owners. Top 6 Construction…
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Debt Service Coverage Ratio – What It Is and How to Calculate It
When you apply for a small business loan, numbers can mean everything. For example, the lender will want to know your income, your credit score, and your debt service coverage ratio (or DSCR). Debt service coverage ratio (DSCR) measures your business’s ability to repay debt by dividing your net operating income by your total debt…
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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 of these problems are temporary and only pose a serious threat if they become chronic. The first four solutions are types of financing that can be used for quick, and the remaining six are long-term managerial adjustments you can…
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Dental Practice Loans: Costs, Terms & Requirements
Dentists use dental practice loans for working capital like payroll or major projects like purchasing a facility. Small Business Administration (SBA) loans for dentists have the best rates and longest terms but take 30 to 90 days to fund. Alternative loans have higher rates but are quick to fund and easy to qualify for. Types…
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Payroll Funding Options and Alternative Solutions
Payroll funding refers to financing used to cover your payroll expenses when you can’t make payments with available cash. It may be needed to fund an upcoming busy season, when you grow too fast, or if you have slow-paying customers. Funding speed is the most important aspect of choosing the right payroll financing option to…
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What Is a Business Line of Credit?
A small business line of credit (LOC) allows you to draw against a predetermined credit limit as you need it, instead of receiving the full loan amount at one time like a term loan. Every draw you make must be repaid, with interest, over a set period of time. This makes lines of credit best…
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Factoring Companies: What They Are & How to Pick One
An invoice factoring company is a financial institution that lends money to businesses based on the value of invoices. Invoice factoring companies offer lower minimum qualifications than other lenders because they rely primarily on the creditworthiness of a business’s customers. Most factoring companies specialize in a particular industry or form of factoring to serve a…
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10 Differences Between Invoice Factoring and Invoice Discounting
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. Invoice…
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Top Alternatives to Invoice Factoring
While invoice factoring may be common in certain industries, it is not a one-size-fits-all financing solution. It does not address large capital needs, and it requires an ongoing invoice assignment. It is also active financing, so even if the business doesn’t utilize the capital, it still must pay a fee. The top alternatives to invoice…
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Filling Out an Invoice Factoring Application in 6 Steps
An invoice factoring application can be completed in six steps, most of which require providing the information a factoring company needs to approve you for funding. The process can take from one to five days, depending on the number of invoices and the speed with which you provide additional information. Once you complete the initial…
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10 Factoring Advantages and Disadvantages
Invoice factoring can help small business owners save time, access funding without collateral, finance growth, and receive large amounts of capital quickly. However, there are sometimes drawbacks like reduced control over invoice collections, the stigma of alerting customers to a factoring relationship, the high overall costs, and a reduction in profits. Each of these factors…
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Understanding Invoice Factoring Rates & Costs
The best way to figure out the cost of factoring invoices is to work directly with an invoice factoring provider. Most will charge a discount rate and several fees to ensure they are compensated adequately for the risk they take by providing funding. By understanding the fees and estimating potential costs, small business owners can…
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