Factoring is New Business Strategy for Funding in 2013

Factoring is an alternative to traditional bank lending for cash strapped small businesses looking to grow in 2013. The United States is finally gaining some power in the labor market, which is helping to fuel small businesses and innovation. But there are still many risks from economic uncertaintiesand and why small to medium-sized enterprises (SMEs) companies think small business factoring should be a consideration.

In 2012 the Small Business Administration (SBA) lending volumes reached $30 billion, the second largest volume of lending by the SBA in over 59 years, and why small business factoring may just come to their rescue. Some smaller community banks are projected to lead the way with SBA lending, but thre reality is the average SME may not be credit worthy. Factoring requires no applications or approvals.

Crowdsourcing is also gaining in popularity. These type of online financial platforms are being used and trusted more and more. With pre-qualified leads, small lending services are taking advantage of the savings that come with online lending platforms.

According to an October 2012 survey from the National Federation of Independent Business (NFIB). It said, “10 percent of small businesses are planning to grow their workforce; while 11 percent plan to reduce headcount.”

Another fear is the new Affordable Care Act, requiring companies with more than 50 employees to provide health benefits or begin paying penalties in the year 2014. Some experts believe that some SMEs will hold back on hiring because of the new law.

Even though many small companies will choose to outsource in 2013, often paying a premium in exchange for fixed costs. Many small technology companies are hiring full time employees as opposed to contractors or outsourcing, because they want people to have a vested interested in the company.

Finally factors are becoming the new micro lenders revolutionizing the small business lending environment. in fact, alternative lenders are now becoming mainstream, and small business invoice factoring being one of these. They make capital available more easily for small businesses. Cash flow is more important than credit scores. Plus they can provide small businesses with loans in short 24-48 hour funding periods.

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