Alternatives to Traditional Bank Loans

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The credit crunch has made it very tough to borrow from traditional banks. So what alternatives are there? Below are two alternatives, one for businesses and the other for individuals.

Purchase Order Financing

A common problem for businesses is that while they are using their resources to fulfill purchase orders, customers are not paying their invoices, putting a strain on the business’ cash flow. A purchase order financing can help. A purchase order finance is a short term loan to the business that entails funding the business with an initial amount to help them finish their order in exchange for payment when the business has received payment and shipped the order.
The benefits of a purchase order finance is that businesses can get cash flow fairly quickly, however, the annual percentage can be past the 40s.

Payday Loans

An alternative for a smaller short term cash flow is a payday loan. Payday loans are granted to borrowers and due during the borrower’s next pay date, usually falling between 7 and 30 days away. Payday lenders usually look for borrowers who have a steady job and an active checking account.

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