For new entrepreneurs, the term “business assets” gets thrown around quite a bit. Banks and private lenders alike will often ask for a list of assets when new business owners are…
Improved purchasing power opens many doors for small businesses. Having the capital on hand to run advertising campaigns, purchase supplies, hire extra help when needed and grow operations is essential for long term success. But how do small businesses increase their purchasing power?
Loans Can Create More Problems Than They Solve
When a business wants to increase their purchasing power, they usually take out short term loans. The capital provided by loans can be used to temporarily increase purchasing power. But what happens after the capital is used? The spending ability decreases, and now the business has to deal with debt and impacted credit ratings. While bank loans seem like an immediate solution, the long term debt actually prevents growth, and can cause small businesses to get into even deeper financial troubles.
Merchant Cash Advances
Merchant cash advances claim to increase purchasing power without saddling businesses with debt. What is not told to business owners is that merchant cash advances have prohibitively high interest rates, and prolonged terms which can place a strain on revenue. Merchant cash advances usually force businesses to take more financing than they need. While this may seem ideal for businesses that want to grow quickly, beneath the surface it simply means that entrepreneurs will be paying a lot more for a lot longer to settle the balance with the lender.
Asset Based Lending
Asset based lending stands apart from loans and merchant cash advances. Asset based lending is a revolving line of credit based around the value of fixed assets owned by the business. Instead of racking up debt through loans, or dealing with hidden fees and interest rates from merchant cash advances, asset based lending offers a much more flexible solution. By creating a revolving line of credit, businesses can increase their purchasing power, and only pay on what they spend. Credit ratings are preserved, and businesses can focus on growth, instead of financial setbacks from loans and MCAs.
Improve Your Purchasing Power Today
If your business needs more purchasing power, but you want to sidestep the pitfalls of loans and merchant cash advances, contact CNH Finance. Our team will perform an in-depth analysis of your assets so you get the best revolving line of credit for the value of your equipment, property, vehicles, receivables, inventory, and more. CNH Finance provides the best asset based lending solutions to businesses across all industries.