These survivors are the ones who will build the empire going forward, so if you look at it, from a global perspective this stage is very critical, as you see new products will come in, along with products the business will come and along with business, jobs will come in too.

In such times, one needs to very precarious while starting off with some form of business. There are a lot of things that come to your mind when you either setting up a business or expanding the business. However; the top priority and the hard to gain for both these things are finances. Most of the business starts off and then end in couple of years with the lack of finance.

What is the need of the hour?
In all the crisis and economic upheaval, one of the best source of gaining access to finance is factoring. In fact if you look at the history of factoring you will realize that it has been in practice for almost over 1000 years now. It has been used during the Roman Era, wherein when the merchants from Rome used to extend credit to customers, the factors at that point of time would advance funds, so that they can use it in place of the future payments which they are in receipt of. Later on this process was used by far flung places like America and Canada.

Various sources of financing:
There are three main ways to provide finance to business.

• Acquiring debt
• Sale of capital in form equity or venture
• Be the master – Do it yourself

However, as of now the debt option is still allowed to certain companies. However; with the economic turmoil happening around the world it is very possible that there can be a curb on this option.

The second one Venture or equity capital is also available to a few limited companies, but these options are also getting narrowed down as they are becoming very particular about the kind venture or business they are planning to invest in. The biggest drawback or disadvantage is that when you get finances in the form of selling equity you tend to lose the ownership of the shares instead the ownership of the shares sold will lie with the owner who buys the shares.

Apart from raising the needed capital from personal funds or applying for business loans from banks, one of the better ways of raising funds is via trade factoring. In fact in this case, with respect to venture capital the ownership will still remain with you as you are the one who is factoring yourself. Factoring, mainly refer as Invoice Factoring or some as Trade Factoring , helps provide working capital especially when SME does not have sufficient funds to roll over when receiving large purchase order.

It act an immediate cash flow obtain from financial institution, in exchange of invoices to be paid by your client, of which you’ll be delivering the goods or services to the client. This is ideally helpful for all the business owners who are able to produce consistent sale of goods be it in terms of product or service with no compromise on the quality of the same as desired by the customers.

Get ready :
You should have all the financial statements ready and have an effective business plan which should include the purpose, revenue and expense of your company. All personal financial reports should be collected. After all, your creditor will need to make sure that you will be able return back their money, once they have provided you with the loan.

The financial institution will also want to know how you are going to use the loan amount and if you are a small business owner, you will most probably be asked to put collateral. Assets like land, vehicle or equipment can be used as collateral or security. This is because if you fail to repay the loan amount, then your creditors will sell your asset to get their money back.

Instructions :
The first step towards applying for a small business loan is to have all the paperwork including financial statements, cover letter along with purpose of applying for the loan. Your creditor will review and prioritize your application based on your presentation only. It would be wise not to apply to a single creditor only. All financial institutions have different upfront costs and loan rates and therefore, thorough online and offline research is recommended.

The next big thing is to fill out your business loan application completely. Along with the application, you should also attach a cover sheet on which all your company’s vital information should be written. Getting some recommendation letters can also help you in getting the loan faster and easier.

The final step :
After several hours of organizing and complying the paperwork, compare the costs and settle on the best financial institution as per your budget, requirements and preferences. This may seem to be a little bit difficult, but with the right knowledge and resources, the entire process will be made much easier than expected.

If you follow all these steps and take care of all these things, you can be sure that your business loan application is at least not thrown away in the dustbin. Even if some lenders send back your application to you, this does not mean that your application has been rejected. They may just need to know more about your company and your financial information.