How to Finance Your Company Using Sales as Collateral

Posted by trust

June 13, 2008

Looking to finance your company? Learn about two financing tools that let you use your sales as collateral.

One of the biggest reasons why small companies can’t get business financing is that they lack the collateral that most financial institutions demand. This puts business owners in a very challenging position because they need the financing to grow – but they can obtain it. Most business owners think that a business loan (or line of credit) is the only financial solution that will help their companies. This is incorrect. There are a number of alternative products that can be better than business loans for certain situations.

One of these products is factoring, commonly known as invoice factoring. Factoring financing helps companies that sell to other businesses on net 30 terms. In other words, it helps companies that cannot wait 30 (or 60 days) to get paid for their invoices. It provides an immediate source of capital that enables you to cover your company expenses and puts your company in a stronger position to pursue new sales opportunities.
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