Other Funding Options When Your Application for a Commercial Business Loan Has Been Denied

Businesses will always need funds for their operations, projects and other ventures. We know that for sure. At the same time, we know for a fact that these funds are not always readily available. Sometimes they are locked up in customer invoices. Others are invested in stocks or in other corporate assets. And in certain cases, there is simply a lack thereof. No matter the reason for their need to raise funds and capital, companies need to work around and find a means to provide for such. One common option that entrepreneurs often lean to is commercial business loans or bank loans.

businessThe sad truth about them is that they often need a lot of requirements and will take a long time before any approval is given. Also banks will look into your corporate credit history and credit score. They will also put into consideration your current financial status and whether or not you have enough corporate and personal assets to provide as collateral for your loan. In the end, many businesses find their applications rejected while some simply could not afford this funding and financing scheme.

What other options do they have? They cannot just give up right? To answer those questions, here is a list of other funding options when your application for a commercial business loan has been denied.

FACTORING is where you sell your right to collect against customer invoices to a third party called a factor. They in turn will give you a percentage of the total value of the invoices hastening your collection. After which they will be the one to collect from your customers. After full payment has been received, the factor will then forward you the remaining balance and deduct from it any agreed upon fees or discounts. In essence, factoring is selling your assets which in this case are your receivables.

DISCOUNTING is something relatively similar to the former as it produces the same effects like better working capital, improved cash flows, reduction of bad debts and quick funds. In fact it also deals with invoices but instead of selling them, discounting makes use of them as a form of collateral where the value that the company receives is relatively similar to the value of the said invoices.

With Invoice factoring and invoice discounting, you don’t have to worry about not having your commercial business loan approved. These two will surely have your back.

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