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What are the realities of business funding?

It may be hard to wean yourself off the tradition ways of funding a business, mainly debt loans, but as the country prepares itself for the second dip in the double dip recession, companies are wondering aimlessly, scratching their heads wondering how they can gain funds.

This is a frustrating situation for companies such as ourselves, at Select Factoring we’re ready and waiting for companies to come and request more information and advice about factoring, but as it stands, people are still now award of the funding solutions available to them, and we need help to educate the masses.

The banks have been reluctant to shell out the traditional funding that business could attain and steer everyone away from overdrafts, this is a big no no at the moment. Infact banks will possibly move towards a way of offering funding which are secured against the businesses assets, in simple terms its a kind of way of factoring. This unfortunately hasn’t been made clear by the banks, they blame the lack of demand for the drop in lending, but come on, get a grip, there are businesses crying out for funding for fear of going under, closing down or claiming bankruptcy!

Companies need to keep check on their drawings their salaries and spending, there is nothing more unattractive than a company with bad debt and no profit.

Enter “alternative funding” mainly asset based funding, so Factoring, Selective Factoring and Invoice Discounting, which allows companies to gain capital from the invoices they hold to be paid by clients.

It seems that Asset based funding has suffered some bad press, and tends to be associated with companies who are in dire trouble, but lets face it, what are the other options? If a company needs money quickly and has capital tied up in invoices, this type of funding is quick and cheap, you’d be a fool not to use it.

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