by ARTIS COMMERCIAL CAPITAL | Aug 15, 2023 | Blog
For small business owners, the fear of bad debt can be a major concern. After all, if you don’t get paid for your services or products, it could spell disaster for your bottom line. Fortunately, invoice factoring is an excellent tool that can help protect your company from taking on bad debt and even improve cash flow in the process. Invoice factoring involves selling unpaid customer invoices to a third-party lender at a discount in exchange for immediate payment.
Understanding the Basics of Invoice Factoring
First, it’s important to understand the basics of invoice factoring. When you factor invoices, you receive an advance payment for your unpaid customer invoices. This means that instead of waiting 30, 60 or even 90 days or more for customers to pay their bills, you can get paid right away. The lender will then collect payments directly from your customers, allowing you to focus on running your business instead of chasing down overdue payments.
Research Factoring Services
Next, when using invoice factoring to protect yourself from bad debt, it’s important to make sure the company you are working with is reputable and honest. Research online reviews and compare rates and fees between lenders before making a decision. Additionally, it’s important to consider the creditworthiness of your customers. The more reliable and financially sound they are, the less risk you will have with invoice factoring.
Establish Clear Payment Terms
Finally, it’s a good idea to set up clear terms of payment with your customers. This will minimize the chances that they will default on their payments and leave you carrying the cost. Clearly stating payment due dates and outlining any late fees or penalties can help ensure that your invoices stay current and improve your chances of avoiding bad debt.
By understanding how to use invoice factoring properly, small business owners can protect themselves from taking on bad debt while maximizing profits in the process. Contact Artis Commercial Capital today to start factoring your invoices.
by ARTIS COMMERCIAL CAPITAL | Aug 8, 2023 | Blog
In today’s highly competitive business environment, small businesses must find ways to stay ahead of the competition. One way they can do this is by using purchase order financing (POF). POF enables small businesses to fund their orders so that they can take on larger orders without straining their resources. By taking advantage of POF, small businesses are able to compete with larger companies and expand their market share.
Financing for Large Orders
Purchase order financing offers small businesses quick access to capital that can be used to fund large orders. It allows them to acquire inventory, meet customer demands, and increase production in a timely manner. This type of funding also eliminates cash flow concerns around the purchase of larger orders, as funds are provided upfront for goods and services. Additionally, it helps free up working capital, allowing businesses to focus on expanding their operations and reaching out to new customers.
No Collateral Required
One of the biggest advantages of purchase order financing is that it does not require a personal guarantee or collateral from the business owner. This helps them avoid putting their own assets at risk while still being able to access larger orders. Furthermore, POF can be used for many different types of orders, including goods and services. This makes it a great option for businesses that are looking to expand their product offerings and services.
Reduce Costs
Lastly, purchase order financing can help small businesses reduce costs associated with acquiring inventory or producing goods. By taking advantage of this form of funding, businesses can access the capital they need quickly and easily while keeping their expenses low. In turn, this helps them to remain competitive in the market and expand their operations.
Overall, purchase order financing is a great way for small businesses to access capital quickly and easily without putting their own assets at risk. By taking advantage of this type of funding, they can compete with larger companies, increase their market share, reduce costs associated with acquiring inventory or producing goods, and free up working capital. This makes POF an ideal tool for small businesses that are looking to expand their operations and reach out to new customers. Contact Artis Commercial Capital today to start using purchase order financing for your business.
by ARTIS COMMERCIAL CAPITAL | Jul 25, 2023 | Blog
Asset-based lines of credit provide a great opportunity for businesses to access working capital while managing their cash flow. This type of financing can be especially beneficial for small and growing businesses that need additional funds to expand operations or purchase equipment. Asset-based lines of credit are also attractive because they offer more flexibility than traditional loans, allowing borrowers to draw from the line as needed and pay back only what is borrowed.
How Asset-Based Lines of Credit Work
When businesses take out asset-based lines of credit, they are essentially borrowing against their assets. This includes inventory and accounts receivable, as well as equipment or real estate. The line of credit is secured by these assets, which gives lenders more comfort because they know that if the borrower defaults on the loan, the lender can seize the collateral in order to recoup its losses. This type of financing is attractive to lenders because it’s a low-risk loan, and they typically offer competitive interest rates due to the security offered by the collateral.
More Financing than Traditional Loans
Asset-based lines of credit also allow businesses to access much larger sums than traditional loans. The line of credit amount is usually based on the value of the assets being used as collateral, so businesses can borrow up to 80-90% of the value of those assets. This provides businesses with more working capital and helps them cover costs associated with growth, such as purchasing inventory or investing in new equipment.
Better Cash Flow Management
Finally, asset-based lines of credit provide companies with flexibility when it comes to managing their cash flow. Since the line of credit is not a fixed amount like a traditional loan, businesses can draw from the line as needed and pay back only what is borrowed. This allows them to access additional working capital quickly when it’s needed, without having to make large lump-sum payments.
Asset-based lines of credit are an attractive option for many small and growing businesses looking for extra funds to capitalize on growth opportunities. They offer more competitive interest rates than traditional loans, as well as the flexibility to access larger sums of working capital. Plus, businesses can use their assets as collateral and benefit from the ability to draw from the line and pay back only what is borrowed. If your business is looking for a way to finance growth without sacrificing financial stability, contact Artis Commercial Capital and learn about our asset-based financing solutions.
by ARTIS COMMERCIAL CAPITAL | Jul 18, 2023 | Blog
Asset-based financing is a great way to fund your business without having to take on additional debt. It involves using your existing assets, such as inventory or accounts receivable, as collateral for loans from banks and other lenders. This type of financing can help you meet short-term liquidity needs and provide the capital required to grow your business. There are several different types of asset-based financing available, each with its own unique set of benefits and risks.
Secured Loans
Secured loans are a type of asset-based financing that involve putting up your business’s assets, such as inventory or equipment, as collateral for the loan. This reduces the risk to the lender since they can repossess and sell the asset if you default on the loan. The biggest advantage of secured loans is that they typically offer lower interest rates than other forms of financing. However, this type of financing also carries some risks; if you default on the loan, you could lose your asset.
Invoice Financing
Invoice financing is another form of asset-based financing in which a lender provides funds based on money owed to your business by customers or clients. The lender will advance you a percentage of the total amount owed and hold the remainder until it is paid in full. This type of financing is great for businesses with steady sales but cash flow problems, as you can access the money right away without having to wait for customers to pay their invoices.
Factoring
Factoring is similar to invoice financing in that it provides funds based on money owed by customers or clients. However, with factoring, the lender typically takes possession of your accounts receivable and collects payments from your customers directly. This reduces the risk to you since you won’t have to worry about collecting payments yourself. However, it also means that there may be less flexibility when negotiating terms with your lender.
These are just some of the asset-based financing options available to you. Each has its own set of benefits and risks, so it’s important to carefully consider which option is best for your unique situation. Before taking out any type of loan, make sure you understand the terms and conditions associated with it so that you can be sure it will meet your business’s needs.
Asset-based financing can provide a great source of capital for businesses looking to grow or cover short-term liquidity needs. By understanding the different types available and considering their advantages and disadvantages, you can choose the one that best fits your business’s needs and goals. With careful planning, asset-based financing can help take your business to the next level. Contact Artis Commercial Capital today to explore our asset-based solutions, and learn how they can help your business.
by ARTIS COMMERCIAL CAPITAL | Jul 11, 2023 | Blog
Are you a small business owner looking for financing options? Traditional bank loans can be difficult to get, especially if you have bad credit or lack the necessary collateral. Fortunately, there is an alternative—asset-based lending. Asset-based lending provides businesses with access to capital while allowing them more flexibility than traditional loans.
What Is Asset-Based Lending?
Asset-based lending is a form of financing that relies on the value of a company’s assets as collateral. This type of loan can be used to finance a variety of needs, including starting up a business or expanding operations. It offers businesses more flexibility than traditional bank loans because it focuses on the value of the assets rather than creditworthiness.
Easy to Obtain
One advantage of asset-based lending is that it is easier to get approved for compared to traditional bank loans. As mentioned before, banks typically require good credit and collateral, which many small businesses don’t have access to. With asset-based lending, all you need is an inventory or other assets with sufficient value—you don’t have to worry about your personal credit score or lack of collateral.
More Capital then Institutional Loans
Another advantage is that asset-based loans can provide businesses with more capital than traditional bank loans. Because the loan is secured by assets, lenders are willing to offer larger amounts of money than they would for an unsecured loan. This can be especially useful for small businesses that need extra funds to grow their business but may not qualify for a traditional bank loan.
Flexible Repayment
Finally, asset-based lending offers flexible repayment options. Unlike traditional bank loans, which require regular monthly payments over a fixed period of time, asset-based loans allow you to pay back the loan amount in installments or on an as-needed basis based on your cash flow. This makes it easier for small businesses to manage their finances without worrying about meeting strict repayment deadlines.
Getting Approved for Asset-Based Lending
To increase your chances of getting approved for an asset-based loan, make sure you have a detailed business plan that outlines how the money will be used and why it is needed. Additionally, provide the lender with accurate information about your assets—including inventory count, estimated value, and past performance data—so they can evaluate your application objectively. Finally, be prepared to pay fees associated with this type of loan; these may include appraisal costs or other setup fees.
In conclusion, asset-based lending provides small businesses with access to capital while offering more flexibility than traditional bank loans. By understanding how asset-based lending works and taking steps to increase their chances of approval, business owners can take advantage of this unique financing option to get the funding they need. Contact Artis Commercial Capital today to learn more about our asset-based lending solutions.
by ARTIS COMMERCIAL CAPITAL | Jul 4, 2023 | Blog
If you’re a business owner, you know how important it is to have access to the right kind of funding in order to help your business grow. One option that many businesses are turning to is purchase order financing. This type of financing can be used for a variety of purposes, from purchasing inventory and supplies to expanding operations or hiring new employees.
How Purchase Order Financing Works
Purchase order financing is a type of short-term financing that enables businesses to pay for goods and services they have ordered from suppliers. With this type of funding, businesses can finance purchase orders for inventory or supplies without using their own cash flow or borrowing money from a traditional lender. Purchase order financing is an attractive option for many small businesses as it provides them with the necessary funds to grow without having to wait months or years until the product is sold.
This type of financing works by allowing a third-party lender to provide funds in exchange for a portion of the total cost of the purchase order that will be paid on delivery. The lender assumes part of the risk associated with completing the project, so they will typically require some form of collateral or guarantee before approving a loan. Once the order is fulfilled, the lender will receive their portion of the total cost plus a fee for providing the funding.
Growing Your Business
Purchase order financing can be beneficial to businesses in a number of ways. It can help businesses that need funds quickly to purchase supplies and inventory without having to dip into their cash reserves or take out loans from traditional lenders. This type of financing also helps companies expand operations without waiting months or years until product sales are sufficient enough to cover such costs. Additionally, it can help businesses build relationships with suppliers by allowing them to pay suppliers on time for goods and services they have ordered.
Overall, purchase order financing is an attractive option for many small business owners as it provides them with the necessary funds to grow without having to wait months or years until product sales are sufficient enough to cover such costs. If you’re looking for a way to finance your purchase orders and help your business expand, this type of financing might be right for you. Reach out to the team at Artis Commercial Capital today to learn more about our purchase order financing program.
