How to sell your accounts receivables
An account receivable is the money for goods or services that customers are yet to pay. Accounts receivable are vital to running a business well, contributing to increased cash flow. However, delays in accounts receivable can lead to significant financial challenges for a company. The best way to avoid money problems in your business due to customers’ delayed payments is to sell delayed invoices to a third party in exchange for cash. This means you give your account receivables to a company that pays you immediately while the company waits for your customer to pay back. The act of selling account receivable is called Factoring.
Easy ways to get a loan for your business
Starting a business may be the best, most exciting, and most fulfilling moment of your life, but significant financial investment is necessary and can be a problem if not found. Funding can be a significant challenge when starting a business, but there are many ways to get good funding for your business, whether you’re just starting or have been in the market for a while. According to a Small Business Administration (SBA) analysis, only 50% of small businesses survive beyond five years. Therefore, Banks are hesitant to give loans to small businesses for startups without a proven track record for fear of future failure.
What are revolving lines of credit?
A revolving line of credit is the type of loan that never ends. You are given access to a certain amount of money, and you can keep borrowing from it as long as you repay what you use. It’s like a tank that never runs out of water given that you repump the tank after you bathe, cook or wash. So no matter what you use, everytime you pump, your tank will be replenished. That’s how a revolving line of credit works. The most popular type of revolving credit line is the credit card, a personal loan that you can use for everyday purchases, paying bills and taking care of unexpected finances.
Understanding installment credit
Installment credit is a loan that you don’t have to pay back all at once. You can create an agreement with your lender to pay it back over a period of time, this means that you pay a certain amount every month until you complete the loan. For instance, say you need a bigger signpost for your tourist shop, and you get a loan of $1,000. But instead of paying the entire $1,000 all at once which might be difficult for your business to manage because you need money for other expenses, you pay back $200 (with interest) for 5 months until you reach $1,000.
TERM LOANS 101: A Starter's guide to finance your business
A term loan is a type of business loan that must be paid back over an agreed period. Term loans are the best solution if you need money to finance your business but can’t afford to take it out of the business. The payment period of a term loan can last between one year, ten years or thirty years depending on the agreement between both parties. A term loan is mostly used for a one-time expense like purchasing equipment, purchasing an asset, purchasing a landed property, or expanding your business.
Register your small business with ease
As an entrepreneur who wants to turn your passion into a profitable venture, starting up your business can be exciting and overwhelming at the same time, it requires planning, detailed work, preparation, and consistency. One of the first steps in starting your business properly is registering your small business. It establishes your business legally and ensures that you run your business according to the various rules and regulations that apply to running a business relating to what you sell, where you are, and your size.
Improve cash flow and boost business growth with invoice factoring
Invoice factoring (or account receivables) is a financial process where you can sell unpaid invoices to another company (a factoring company) so that they pay you on behalf of the customer, while they wait to collect the money from the customer when they’re ready. This means that you no longer have to wait till your customer makes payment for an item or service before getting the money.
All you need to know about SBA loans
The Small Business Administration (SBA) is a government agency in the United States created to support small businesses in various capacities, one of which is giving out loans. It’s an easy process where the SBA acts as a guarantor for these small businesses and ensures they get the funding they require from lenders. Their role as a guarantor means that they will pay back some of the money in case the business fails to pay back after a certain period.
The ultimate guide to equipment financing.
Equipment financing is essentially a loan or lease that you get for the sole purpose of buying, upgrading or changing your work tools. Whether it is getting a new truck, a photocopying machine, or upgrading your laptop, improving your business equipment is usually an expensive process that can affect the day-to-day finances of the business. Getting an equipment loan helps make the process easier by lending you a huge amount for the tool you need or giving you the tool in credit.
How to manage your working capital
Working capital is money you have to run the day-to-day expenses of your business, such as paying rent, buying/renting equipment, or paying salaries. This is not the same as operating capital which is about running your business effectively by using saved up money in a smart and helpful way. Basically, working capital is like the money you have in your wallet to get a train ticket when going to school, while operating capital is the money in your bank account that you are planning to buy a car with. Working capital is used to fund basic operations and also meet “right now” needs.