Types of Telecommuncation Loans for Your Retail Business
Telecommunications financing has been taking off as a lending sector over the last decade or so as more and more businesses establish themselves in the industry. Like any business sector, telecommunications companies need financing designed for their niche, whether they are trying to establish infrastructure and deliver service or providing end users with the hardware they need to access that service seamlessly. For retail businesses in this sector, understanding the core business financing tools that can benefit your operation is essential.
Understanding the financing your company needs is a matter of understanding your goals for the financing and the length of the repayment window. Asset financing is available in the form of invoice financing and, for retail companies, sometimes merchant cash advances against your credit card transactions. These forms of financing allow you to procure the inventory you need. Invoice financing is great when customers owe you money, and MCAs are designed for businesses that can plan on active sales in the near future.
Telecommunications financing is about more than just short-term credit, but the credit line is also important because it provides versatile working capital in a renewable way. Sometimes, it’s easier to use asset financing to access the advance you need, but as your business uses financing more and more regularly, a credit line will make more sense.
For long-term investments like asset purchases, SBA loans offer smaller companies an affordable way to make those big investments. They require you to establish your financial health and confirm your company fits the definition the SBA uses for small businesses, but if you do, the program provides preferential loan terms. Traditional loans can also work for companies looking to make big asset purchases, provided your company’s income qualifies you for it.
Cash advance and alternative financing arrangements are also an option for telecommunications financing, and they can take a variety of innovative forms. Alternative financing does tend to be a little more expensive than the other forms, which typically range between six and ten percent for many forms of traditional credit and loans. Invoice financing is the exception, because interest is calculated weekly at a rate of one to two percent in most invoice financing agreements.
If you’re trying to decide which options are best for your telecommunications company, it helps to talk to a professional. If you’re working with a financing company that has a lot of options, don’t be afraid to ask for a breakdown that explains how different loan products will interact with your business cycle.