Classic small business loans are difficult to find these days for everyone, but telecommunications funding is scarcer. The real reason for this is that your traditional lenders are wary of the entire telecom operation. Business is not black and white as in retail and many banks don’t understand telecoms and are therefore frightened of taking a chance on them. Luckily, there are entities that target solely on telecommunications capital.
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Here are the options made available from these specialty lenders should you be looking for some working capital for your small to medium sized phone system venture:
Factoring- You have account receivables (invoices) seated in a folder ready for payment. In the telecom industry, you will wait 45 to 92 days before payment is remitted. Meanwhile, a great deal on some new equipment may come up or maybe you will need to revamp your marketing strategies- whatever the opportunity, you may need cash now but it is sitting in a folder in the form of an invoice. With specialty lenders, you sell these invoices at a reduced rate and get the cash rather than 2 to 3 months later.
Asset-based loans- This telecoms funding solution works if you have enough possessions to set up as assets. You can borrow against equipment, inventory, accounts receivable and even contracts. While collateral, you are able to use the success of your business to make it even more fortunate and grow.
Applying a specialty lender who is experienced in telecoms funding also means less hassle for you, the organization owner. You do not have to make any personal guarantees, non-recourse negotiating and, unlike traditional small business loans where you could lose everything if you default, the only things at risk will be the specific assets tied to the agreement.