Start up businesses will have their own unique challenges in finding business financing. Many companies get their start during recessions, but how do you prevent your startup business from joining the 25% that fail in their first year? You focus on strengthening cash flow. Bank loans will be hard to come by. Venture capitalism or crowd funding will be difficult during a recession. Invoice factoring, on the other hand, is a reliable cash flow tool that can finance startup or new start businesses. Business credit and time in business don’t matter for approval decisions. Here are your startup business financing options.
Startup Invoice Factoring
Invoice factoring is a great method of small business financing for start up businesses. This is because factoring services do not rely on a start up business’ credit score or time in business. Approvals depend on the strength of your receivable and customer. So if you run a good business and sell to well-paying customers, you have access to a reliable start up financing to continue your business growth. What is great about using factoring as startup business funding is the growth potential. Factoring facilities grow in line with the volume of sales you make. This means the more you grow, the more funding you have. All of Eagle Business Credit’s factoring facilities are debt-free. There are no repayments to make, so your expenses stay low as your revenue goes high.
Startup Business Financing During COVID
Start up financing is hard to find when the economy is strong and there isn’t a global pandemic. COVID and a recession are only furthering the challenges facing start up businesses when it comes to financing approval. Even the alternative lenders to banks are struggling to offer funding to small businesses. Online lenders that use algorithms for underwriting are having challenges with evaluating credit-worthiness amidst the drop off in revenue most businesses faced in spring and beyond. Merchant Cash Advances are harder to obtain, too. Invoice factoring or accounts receivable financing truly is a reliable and attainable financing method for startup businesses looking to grow.