What is alternative finance?
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There is no definition prescribed anywhere about the alternative finance, but we can say that the finance which is obtain from the other external sources other than the bank or bond, etc. so the alternative finance is an option which is available to the businessmen, that if you don’t get a bank loan then also you can get access to the cash and the needs in the business.
So you can go to the alternative finance provider who lends the money to the businessman with approved finance in hours so that it can help the business to grow.
Types of the alternative finance :
Here are some of the alternative finance types , if you are facing difficulties in getting finance from notified institutions, available in the market which will be helpful to the businessmen in daily needs as well as to get the liquidity by having the cash in hand by Financeshed.
Merchant cash advance:
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The merchant cash advance is the way of financing in which the financer lends the money to the business and the recovery can be made by the financer as a percentage of the future credit sales of the company. So the company will have to pay the financer by the way of their part of the daily credit card sales until the payment of the amount and interest are made to the lender.
Revenue cash advance:
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The Company which does not have the credit card sales much will not be able to pay back to the lender and so it will not be possible that the business will be provided the merchant cash advance, so the concept of revenue cash advance comes into the picture. Here the businessmen just need to pay the small amount of the deposit every day until the whole amount of the payment is made with interest due.
Receivable based finance:
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The method to lend the money to the borrower is as same as the 2 of the above, only here the lender looks at the receivable of the business and the history of invoice collection to decide the decision of providing the global finance to the borrower.it is a popular way of finance because the funding is immediately as well as the interest rates are lower than the 2 of them above.
Account receivable factoring:
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This method is like factoring any bill with the bank, you can do factoring with the lender like factoring a receivable bill with the financer and the customer will have to pay the directly to the lender. This method is popular because of easy availability of cash as well as it provides flexibility to the business as to when and how much finance they need.
Loans, micro loans and lines of credit:
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The advantage of loan is that the borrower will get the fixed schedule for the payment as well as the specific or floating interest rate option is also available. Where the line of credit lets the businessmen do the financing as per his needs, during the period of line of credit the borrower can borrow the money and pay it back and also he can get back the loan.