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Diving into Alternative Funding: Beyond Traditional Lending

Updated: Nov 13, 2023

In the ever-evolving financial landscape, businesses have a wealth of choices when it comes to securing capital. While SBA loans and commercial term loans are often front and center, alternative funding options have carved out a significant niche, offering flexibility and accessibility to a broader range of businesses. If the traditional routes aren't aligning with your business needs, it might be time to explore the world of alternative funding.

Key Alternative Funding Options:

  1. Accounts Receivable (AR) Purchasing: If your business has unpaid invoices, AR purchasing allows you to sell these invoices to a third party at a discount. It's a swift way to unlock tied-up funds and improve cash flow without waiting for clients to pay.

  2. Factoring: Similar to AR purchasing, factoring involves selling your unpaid invoices to a factor (third party). The factor advances a portion of the invoice value upfront and takes over the collection responsibility. Once the customer pays the invoice, the factor provides the remaining balance, minus a fee.

  3. Merchant Cash Advances (MCAs): MCAs offer businesses a lump sum in exchange for a portion of future credit card sales. This is especially suitable for businesses with strong credit card sales but fluctuating revenues. Repayments adjust based on daily sales, offering flexibility during lean periods.

  4. Equipment Financing: Need new equipment but don't have the capital on hand? Equipment financing allows businesses to borrow money specifically for purchasing machinery, vehicles, or technology. The equipment itself often serves as collateral, reducing lender risk.

  5. Unsecured Business Loans: These loans are not backed by collateral, making them more accessible for startups or businesses without significant assets. However, they might carry higher interest rates due to the elevated risk for lenders.

Each of these alternative financing methods offers its unique benefits, tailored to address specific business challenges and needs. And while the options are diverse, the goal remains consistent: fostering growth and ensuring stability.

At Quantifi, we specialize in guiding businesses through the maze of funding options. Whether it's understanding the intricacies of factoring or exploring the potential of MCAs, our team is here to support your growth journey. Ready to dive deeper into alternative funding? Sign up with Quantifi today for a no-risk qualification check.

– The Quantifi Team

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