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The income from your business covers regular expenses such as your supply purchases and heating bills. However, if you need to conduct a major purchase, such as buying new equipment or completing extensive renovations on your property, you probably need to find another source of funding. Consider using one of the following methods to get the capital you need for your transaction.
Take out a Home Equity Loan
Home equity loans function like most other loans; you borrow a large sum of money from a bank or another lender, and you repay the amount plus interest over a period of time. When you take out home equity loans, such as those found on https://creditarch.com/home-equity-loan/, your existing house serves as collateral. Check your lender’s policy on houses with existing mortgages before signing the paperwork, and keep in mind that your lender may have several types of credit available based on your needs.
Factor Your Accounts Receivable
Your accounts receivable are the invoices that you have from clients who have not yet paid their bills. You stipulate when clients must pay their bills in your contracts with them, but they are often late. If you need money immediately, you can sell your accounts receivable in a process called factoring. Another company, called the factor, buys your invoices from you. The factor gives you the money right away but keeps a percentage. Then, when clients pay their bills, the factor receives the money. While you do not receive all of your money if you use factoring, you do have advance access to your capital.
Sell Your Unused Equipment
If your company has existed for more than a few years, you probably have lots of unused equipment in your facilities. Whether it’s broken or simply outdated, you don’t use it anymore, but other people might. Contact your local recycling facility to see if they pay for large metal pieces. Check with new and small businesses to see if they are interested in purchasing your old equipment for a discount. This process takes very little time and does not cost you any extra money.
Finding funding for a major purchase can cause a budgetary nightmare. Before you panic and assume that you can’t afford an addition to your building or new printers, investigate your options for funding sources such as loans. You’ll discover that there are plenty of ways to expand your business if you take the time to look.
