Understanding Alternative Commercial Financing and dispelling the myths.

Take the word alternative, the definition of the word: 1. a choice limited to one of two or more possibilities, 2. one of the things, propositions, or courses of action that can be chosen, 3. a possible or remaining course or choice, 4. affording a choice of two or more things, 5. employing or following nontraditional or unconventional ideas, methods.

By the nature of the word, the definition, describes it as the possible second choice, the untraditional or unconventional way of accomplishing your task or reaching your goal. The definition itself suggests, this may be the second choice to solving your problem. What if your first choice can not be achieved? Is this now really an alternative?

Many business owners, professionals, accountants and bankers are sometimes hesitant to use or recommend alternative business financing. Why? Could the myths associated with alternative commercial financing, “it so expensive”, “my business is not in trouble”, be the reason some of these professionals hesitate to recommend alternative financing?

Let’s face the reality, the economic environment today has changed, traditional lending is a thing of the past for many business owners, they are forced to seek untraditional finance solutions for their business. Alternative Commercial Finance is no longer a second choice; it has become their only choice. It has become imperative for all business owners to fully understand alternative commercial finance; their business success depends on it!

Let’s look at the so called myths of Alternative Commercial Finance:

1st Myth: Factoring is too expensive:
Truth is that factoring* is a cost effective way to get funds for your business. As compared to raising capital from equity in your business, often may result in giving up a portion of ownership. The use of factoring to fund new growth, with a slight reduction of profit, (the cost of factoring*), is comparable to vendor discounting or COD discounting and certainly out weights the possibility of not being to accept the new business.

2nd Myth: Factoring of accounts receivables is a sign that my business is in trouble.
Who would you rather do business with? A company who found a solution to their cash flow problem. Or the company who may not be able perform due to cash flow problems. Factoring is a viable means of finance; it will prepare the business for a stronger future, can improve a company’s credit rating, provide cash to meet obligations and does not create debt on the balance sheet.

Factoring*: http://azrogala-cash-flow-solutions.blogspot.com/2009/07/factoringa-working-definition.html

The cost of Factoring*: cost is between 2.5% to 5% for 30 days, these are estimates only. A detailed cost can only be given once a company profile and underwriting is complete.

AZRogala REI, is a proud member of the International Association of Commercial Finance Brokers, we pride our service on education of our clients on all aspects regarding alternative commercial financing.

Act NOW for a FREE Consultation, Company Profile and COST Analysis valued at $300. Factoring, Commercial Accounts Receivable Factoring, PO Finance, Export-Import Trade Finance, Equipment Leasing.