Why Invoice Financing may be better than a Business Loan

Invoice Financing vs Business Loan

Invoice Financing may be better for your
company than a Business Loan.

Invoice Financing vs Business Loan

According to The Service Corps of Retired Executives (SCORE), 82% of start-ups and small businesses fail because owners have a poor understanding of cash-flow management and lack the ability to access working capital needed for growth.

One funding option that is often overlooked is invoice financing. This alternative lending method does not have the same strenuous requirement process as a traditional business loan. The main qualification is that a company has customers with outstanding invoices that are paid on terms. Below, we will take a look at why invoice financing might be a good fit for you.

Invoice Financing means...

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No Debt Added

Invoice Financing doesn’t require a company to take on additional debt or have the pressure of paying back debt. The less debt acquired, the better your balance sheet, financials, ratios and investor perception. It also allows companies to receive needed capital without the hassle and risk of a loan.

Quick Funding

If a company needs money fast, there are few better options then invoice financing. In 2-3 days, a company can receive up to 90% of their outstanding invoices. After initial funding, capital can be provided within 24 hours.

Simplistic, Fast Process

In order to receive a bank loan, a company has to provide all of their financial statements, have very good credit, and have been in business for a good amount of time, generally more than 3 years. In contrast, invoice financing lenders are mostly concerned with the credit of the entity (debtor) that owes on the invoice, or your customer. This non-traditional approach takes a lot of pressure off the company in need of money.

No Debt to Payback

Because the money advanced is not a loan, it does not have to be paid back. As a result, there are no payments, principal, and interest to be made. The invoice is paid back by your debtor when payment is due and they receive no hassle about early payment, in turn increasing customer satisfaction.

3rd Party Handles Collections

Most Invoice Financing lenders will also handle collection duties for all invoices (even invoices not being financed). This service can provide huge savings for your company, as well as the ability to concentrate on managing your business and not having to worry about collections.

Does Making Payroll Stress You Out?

Payroll Funding

Payroll Funding may be the answer.

Payroll Stress

What is Payroll Funding?

Funding payroll can be a challenge without a constant source of cash flow. Even if your customers pay within 30 days, your employees likely need to be paid sooner. If your customers have longer payment terms of 45, 60, or even 90 days, Payroll Funding may be a necessity for paying your employees on time.

How does Payroll Funding work?

Slow paying customers, rapid growth periods, seasonal patterns, selling on credit terms, and other factors can create cash flow challenges for your business. With Payroll Funding, rather than waiting for your customers to pay, SouthStar will advance up to 95% of the total value of your unpaid invoices immediately. Then you receive the remaining balance, minus a small fee, once the invoice is paid. This process can be repeated for as many invoices you submit.

By having access to unlimited working capital, you will always have the cash flow needed for payroll, as well as other expenses. The process creates zero debt for your company, so you won’t have to worry about paying back loans or high interest rates.

The 5 Steps of Payroll Funding

Payroll Funding Process

What to Expect with Payroll Funding

As client of SouthStar’s Payroll Funding solution, you will be assigned a personal account manager who will handle collections, payment processing, and customer credit approvals, allowing you to focus on your business. With Payroll Funding, we look at the credit history of your customer, not your company or personal credit history. Years in business is not a factor in our decision to finance, making Payroll Funding great for start-ups.

Once established with SouthStar, you will receive same-day funding on submitted invoices. This gives you access to unlimited working capital, right when you need it. Payroll Funding also allows you to extend longer payment terms to clients and grow your business.

Your Business May Be at Risk of Growing to Death

Business Grow to Death
business growing

Growth is usually viewed as a positive step for business owners, but if not managed properly, growth could be the death of your business.

If your business grows too fast, or grows the wrong way, you can actually grow yourself out of business. Along with growth comes the costs of additional staff, system development, and changes in operations. Without access to working capital, your business won’t be able to support these essential changes.

By tapping into your business’s Accounts Receivable, or outstanding invoices, you can free up existing capital and have access to the immediate cash flow needed for growth. Other assets, such as equipment, inventory, or purchase orders, can be used as collateral to advance capital to your business as well. Both of these options have a fast and easy qualification process that allow for initial funding in just 2-3 days. Unlike traditional lenders, we will not turn you down based on amount of years in business or your credit history. Plus, after initial funding, working capital will arrive in your bank account within just 24 hours of submitting an invoice.

If your business is growing faster than your capital can keep up, don't let it grow to death! Treat yourself today and learn more about your working capital options.

Learn More

SouthStar’s Recent Working Capital Solution

Working Capital Solution

Providing alternative solutions to businesses in need of a fast and reliable source of working capital.

Below is one of our recent funding solutions that provided our client with the working capital needed to ensure the growth and success of their business.

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$1,000,000 Receivables Line coupled with a $350,000 Equipment Lease, along with a Brokerage Line of $500,000 and a $100,000 Term Note for a Trucking and Storage Company

SouthStar Transaction

Contact us today to discuss the working capital options available to your business.

SouthStar Advantage 4: Get Real-Time Management

SouthStar Capital
real time management

With SouthStar Capital, your company is assigned a dedicated account team that is always present to meet your unique cash flow needs.

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Get Real-Time Management

  • Manage cash real-time with 24/7 access to your customizable funding reports through our online client login
  • We provide the services of handling your collections, payment processing, account management, and underwriting, in-turn saving you time and money
  • Our day-to-day accounts receivable management also includes the invoices you are not financing, so you stay up to date with your receivables, all in one place
  • You submit your invoices electronically directly to your account manager and then receive funding within 24 hours
  • We provide working capital fast, so you can focus on operating and growing your business
  • Your account manager is available 24/7 to provide working capital when you need it

SouthStar Advantage 3: Our Service is Centered Around You

Service Centered Around You
Service Centered Around You

With SouthStar Capital, we care about your success. We take the time to understand your business and tailor fit a solution to your unique needs.

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Our Service is Centered Around You

  • You deal directly with a decision maker, in-turn expediting initial and future funding
  • Your company is assigned an account team to handle your daily funding needs
  • Our approach is hands on, so we are able to address each and every one of your needs
  • We are a private company, so you receive flexibility and custom solutions
  • We have over 30 years of experience in designing custom capital solutions for businesses like yours
  • Relationship and professionalism are cornerstone of our business
  • We are here to listen to your story and provide a solution that fits your unique circumstances

SouthStar Advantage 2: Grow with Confidence

Grow with Confidence

With SouthStar Capital, our ability to help you goes beyond just providing working capital. We care about your success and tailor fit a funding solution for your company's both current & future growth.

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You Grow with Confidence

  • We prescreen your potential clients, so you can better understand their strengths, payment habits, and creditworthiness
  • No limits are imposed, so you control your growth
  • No hidden costs or fees, with the option to build our fees into future bids or projects
  • You receive funding within 24 hours of providing an invoice
  • We do not put a ‘bandaid’ on the the problem, instead we implement a solution that will benefit your business both now and in the future
  • No equity is require for funding, so you keep 100% ownership of your company
  • No debt is added to your balance sheet, so you can grow your business without the stress of paying back debt

How You Can Be a ‘Shark Tank’ Winner

Shark Tank
Shark Tank

Getting the chance to be on the reality show ‘Shark Tank’ can be a huge opportunity for any business. Having a great idea and company can only get you so far if you lack the working capital to grow.

What if we told you that SouthStar Capital can provide the same benefits as the show ‘Shark Tank’, but our version is even better? We can provide your business with the capital needed for growth, but we do not require any equity within your company. Instead, we use the existing assets you already own and turn them into working capital. In-turn, you keep 100% ownership of your company and have unlimited access to working capital.

SO...

  • If your business needs working capital for start-up or growth
  • If you dream about how much your business would benefit from being on the show ‘Shark Tank’

SouthStar Advantage 1: We Think Outside the Box

Think Outside the Box
Alternative Lending

SouthStar Capital takes a non-traditional approach to funding by providing our clients with alternative lending solutions.

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We Think Outside the Box

  • Our credit decision is based on your company’s assets and the creditworthiness of your customer, not your past financial performance
  • Years in business is not a factor in our funding decision
  • Underwriting in done in-house, so we can provide funding faster (close in just 2-5 days)
  • Mix our diverse products to tailor a solution that most benefits your business
  • We are a private company, meaning you receive flexibility and custom solutions
  • We work with tax liens, balance sheet issues, and DIP financing

Collateral

Collateral

You may have collateral and not even realize it…

Collateral

When looking for a source of capital, there are several factors your lender may take into consideration. For instance, traditional lenders will first look at your company’s credit history, balance sheet strength, and years in business when underwriting a loan. This way of thinking leads to many businesses being turned down and not receiving the funding they need.

SouthStar Capital takes a non-traditional approach and uses your business’s assets, or collateral, to make our funding decision. In-turn we are able advance your business capital by using your collateral as leverage.

Accounts Receivable

Any outstanding invoices or money owed to your company by your customer.

Equipment

Equipment your company owns, such as machinery, trucks, and specialty equipment.

Inventory

This includes both Work In Progress (WIP) and Finished Goods, each evaluated differently.

Purchase Orders

An order you obtained from a quality company that has agreed to accept your product or service.

Real Estate

Property consisting of land or buildings that is owned by you or your company.

Intellectual Property

Refers to creations of the mind and includes such things as patents, formulas, and inventions.

Stock

This includes both traded and privately held stock, each being evaluated differently.

Letters of Credit

A letter issued by a bank guaranteeing that your customer is able to pay for your goods or services.

Certificates of Deposit

A savings certificate issued to you, by the bank, with a fixed interest rate and maturity date.

Rolling Stock

Both powered and non-powered wheeled vehicles used by your business on the railway or roadway.

Contact us today to learn more about the collateral you may have and your funding options with SouthStar Capital.

CONTACT US TODAY!