"Business Debt is like any other trap, easy enough to get into, but hard enough to get out of."
Alternatives to High-Cost,
Short-Term Business Debt Financing Options
The high-cost and short-term repayment period of a Merchant Cash Advance MCA or similar business financing product creates cash flow issues so you may want to consider more reasonable business financing options.
There are several types of traditional bank loans or alternative financing options to consider.
More diverse loan options are available in the bank and non-bank lending marketplace.
Invoice or Purchase Order Factoring
Invoice or purchase order factoring is another type of financing arrangement where a business’s receivables become the collateral on a lump sum payment disbursed to the borrower upfront.
With invoice factoring, businesses can sell their unpaid invoices to a factoring company to secure an advance against future invoice payment.
Term Loans
Term loans are a traditional type of financing where the borrower receives a lump sum payment upfront and then repays the loan over time.
Term loans can be short-term loans or long-term and may be unsecured loans or secured loans, that require collateral. The financing costs of a term loan include interest, which is determined based on the creditworthiness of the borrower.
SBA Loans
The U.S. Small Business Administration facilitates several loan programs where they partially guarantee a percentage of funds for approved borrowers. SBA loans offer low-interest loans with smaller down payments than traditional bank loans, but have stringent requirements and require submission of a business plan.
The most common SBA loans for new business owners are the SBA 7(a) loan and SBA Microloans.
Business Lines of Credit
With a business line of credit, the borrower is approved for a maximum line of credit through an online lender, bank, credit union or private investor or investor group (family office, credit hedge funds, etc).
Businesses can then withdraw cash at anytime as long as it remains available.
The payments on a business line of credit are made up of principal and interest, which is only calculated on the amount of funds currently withdrawn.
BUSINESS DEBT & CASH FLOW SOLUTIONS
Bernarsky Partners LLC is a business financial services advisory firm comprised of finance professionals with extensive industry experience offering Business Debt Solutions.
Some of our Business Debt Solutions include:
2. RESTRUCTURING BUSINESS DEBT
4. BUSINESS CASH FLOW ANALYSIS
Setup a free consultation call with us to review your business debt and cash flow situation, business goals and to discuss Business Debt refinancing and restructuring options.