The very mention of the term “bank loan” to a business owner is frequently enough to elicit a very strong and visceral response and the simple truth of the matter is that the average business bank loan is a fairly contentious and controversial subject within the business enterprise community. On one hand, a bank loan provides the business enterprise owner with a way to obtain capital that they otherwise wouldn’t normally have, which in turn can mean that bold ambitions of expanding and developing the business enterprise in a particular direction could be more fully achieved and accomplished with a minimum of disruption.

That is especially significant in highly competitive sectors of the marketplace, as any measure of delay can ultimately result a business that chose to postpone any kind of development or alterations to the way in which in which they do business being overtaken by way of a rival. The downside here however, is that the loan will undoubtedly be required to be repaid and so if the business enterprise is struggling to create enough revenue, or even worse, is already in debt, then your repayment maybe too much of a burden because of its finances.

Furthermore, so as to actually access a bank loan, a small business will typically be required to secure assets that it owns as collateral, and so a noncompliance with the terms of the loan will ultimately mean that the assets secured as collateral maybe seized by the lender.

Financial Coach , there is an alternative strategy for the struggling business proprietor who is looking to secure another external source of capital finance to supply their company with a much needed kick start: a receivable financing company.

A receivable financing company, or perhaps a factoring agency because they oftentimes referred to within business parlance, is really a business entity that may purchase outstanding invoice accounts from a company and then supply the client company with a amount of cash upon receipt of the invoices. The receivable financing company will then assume full, legal responsibility for the collection process of the money owed by your client specified on the invoice.

Once the client has paid the entire balance owed to the receivable financing company, the factoring agency will release the remainder of the funds owed to your client company….with a small deduction created from the funds received from the client so that you can cover the expenses that they have incurred.

One of the major benefits of using a factoring agency is that your client company will be guaranteed to receive a fairly massive amount money in a very short space of time indeed which effectively eliminates and protects against the risks an unpredictable and capricious amount of cashflow will pose to a client company.

Furthermore, this method of business financing will effectively mean that the agency is in charge of the collection process thereby freeing up enough time and money of your client company who will not have to cope with the chasing up of fees or commissions owed.