Our Guide To Alternative Financing
In this day and age, going to the bank for a loan is not your only option. There are many ways in which you can acquire alternative financing to make sure you get the money you need. Whether it is for a time of crisis, you need some extra cash to keep you ticking over or any other situation in which extra money is required, it is essential that you are informed in regard to the various monetary options available in today’s market.
If you are unfamiliar with this term, this is a fairly simple construct to get your head around. Invoice financing is a great way to get cash in your invoices. This is especially true if you have larger invoices that remain outstanding, or you have larger projects currently underway.
The premise here is where a lender will effectively buy your unpaid invoices from you, so you can get hold of the majority of the value immediately. Once your customer finally pays the invoice, you will be able to acquire the remainder of the balance, with the lender fee subtracted from this.
There are two types of asset finance worth considering. As the name suggest, the first of these is a form of funding that will be secured against an asset or asset. Essentially, items of value that you own are used as a form of security for a loan. Asset finance is often available from direct lenders with many offering same day loans. It is important to carefully search the market before taking out a loan of any sort and to ensure that they are FCA approved before going ahead with a loan such as this. Additionally, always ensure that you are using a trusted lender.
The second form of asset finance includes products such as equipment which is designed in a specific way for funding new and/or used assets such as machinery, cars, or other high value property such as these.
Crowd funding and per-to-peer lending is an increasingly popular form of finance. Here, online platforms have the ability to connect businesses that are in need of finance with various individuals. This will usually involve investors who will then take a small portion of equity in the company, which is known as equity crowdfunding, or through lenders loaning money as well as earning interest upon each repayment, known as peer-to-peer lending.
The idea within this is to create a arrange that hold mutual benefit for both parties. This will allow for businesses to get much easier access to finance while the lenders or the investors involved are enabled with the ability to support small businesses, allowing for a more diverse portfolio without any third parties or middlemen needing to be involved. Although these tactics are not suitable for every firm, if you have a business plan that is strong enough, it can be a great form of investing and making cash. Always assess all potential options before choosing any form of finances and scour the market carefully.