Businesses in the communications industry often struggle to get telecommunications financing from traditional lending sources such as banks because these lenders wonder about the future of the industry. Getting access to funds is possible,Telecommunications Financing Is Possible Articles however, for communications businesses that know where to look. The secret is finding a lender that understands the way the communications industry works.
Reasons Communications Businesses Need Funding
There are many reasons a business may find need for telecommunications financing. Sometimes a successful business is presented with the opportunity to acquire another business, but lacks sufficient working capital to do so. Funding from a third party can provide these funds while allowing the business itself to continue operation. Other times a business may go through a particularly tight period when customers are not upholding their payment obligations. Again, funding can give working capital to get through these times. Funding may also be necessary to fuel growth without dipping too deeply into assets.
Types of Telecommunications Financing
Sources of funding for communications companies are not always as simple as they are for other industries.
One funding option is an asset-based loan. These loans are backed by some sort of company asset and if not repaid, the asset will be liquefied. If you own your business’s property or have other large assets, this can be a good funding source.
Another more creative type of loan is an accounts receivable managed it support services loan. This uses the money from bills you will be receiving payment for in the near future as the collateral behind the loan. This works well for those who have a significant customer base.
Factoring is another resource for telecommunications financing. Factoring is basically a cash advance on accounts receivable. If your business knows it has money coming from your customers, you can get the money now to do what you need to do to run your business. Factoring allows the lender to purchase customer invoices at a discount. The payment is then given to the lender, rather than the business. The lender’s profit is the difference between the actual invoice amount and the discounted payment they gave to the business.
Telecommunications financing is a unique industry that requires the expertise of a lender who understands the ins and outs of this specific industry. If your business needs help with cash flow, money to grow, or funds to acquire another business, take the time to find a lender with industry knowledge and experience.