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How to Get a Small Business Loan in Iowa: 7 Top Local Funding Options

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The state of Iowa offers several financial resources for entrepreneurs who want to start or grow a business in the Hawkeye State. If you’re wondering how to get a small business loan in Iowa, know that eligibility for these small business loans and grants varies depending on the stage of your business, your company’s impact on the local economy, and the industry you’re in. Iowa reserves some financial assistance programs for women business owners, minority business owners, and entrepreneurs from other underserved demographics.

Over 260,000 small businesses operate in Iowa, active in a variety of industries ranging from agriculture and food production to renewable energy and information technology. The state government actively tries to encourage business owners to set up shop in and expand in Iowa. And the average Iowa entrepreneur receives $47,480 from lenders, a healthy amount of capital to launch your company or take it to the next level.

Top 7 Iowa business loan and grant options

The top seven ways to get a small business loan in Iowa include:

  1. Iowa Self-Employment Program

  2. Iowa Targeted Small Business Program

  3. Iowa Linked Investments for Tomorrow Program

  4. Iowa Innovation Acceleration Fund

  5. Iowa Demonstration Fund

  6. Iowa Proof of Commercial Relevance Program

  7. Iowa High Quality Jobs Program

In this guide, we’ll explain each of these seven ways to get a small business loan in Iowa that can help you reach your business goals.

Your local funding guide to Iowa small business loans

If you’re looking for a local funding solution for your Iowa small business, there are several opportunities that you might be eligible for. Small business loans for Iowa businesses primarily come from nonprofit lenders or from government small business loan programs administered by the Iowa state government. The state and private organizations also operate grant programs. The difference between business loans and business grants is that you don’t have to pay back a grant. You do have to pay back a business loan with interest.

1. Iowa Self-Employment Program

The Iowa Self-Employment (ISE) program is a grant program run by the Iowa Department of Vocational Rehabilitation Services (IVRS). This program is designed to help business owners with disabilities achieve financial independence and fulfillment by starting, expanding, or purchasing a small business.

Small businesses eligible for the ISE program must be:

  • At least partially owned by a business owner with a disability

  • A for-profit business located in Iowa

The more money you’ve personally invested in your Iowa business, the bigger the grant you can receive through ISE. IVRS will match your investment dollar-for-dollar up to $10,000. This money can be divided between the business owner’s general financial needs (e.g. buying business equipment, buying inventory, and covering advertising costs) and technical needs (e.g. accounting, web design, and legal costs). To get started or to see if you qualify, you’ll need to contact an IVRS counselor near you.

2. Iowa Targeted Small Business Program

Iowa Targeted Small Business (TSB) Program provides small business loans for minorities, women, disabled veterans, and entrepreneurs with disabilities. The loans are provided through a nonprofit called Iowa Center for Economic Success.

Your business must meet the following requirements to be eligible for an Iowa TSB loan:

  • Located in Iowa

  • For-profit business

  • Annual gross income is less than $4 million

  • Business is majority-owned (51% or more), operated, and managed by a woman, minority, service-disabled veteran, or person with a disability

TSB loans go up to $50,000 ($30,000 for new businesses) and can be used for a variety of business startup and expansion purchases, including equipment purchases, inventory, rent, and more. The loan terms are very favorable to small businesses as well, with below-market interest rates of 3% to 5%, fixed monthly payments, no-prepayment penalties, and up to five-year repayment terms. You can apply for a loan on the Center for Economic Success’s website.

3. Iowa Linked Investments for Tomorrow Program

The Iowa state treasurer runs the Linked Investments for Tomorrow (LIFT) program to provide loans to Iowa-owned and operated businesses. One-half of the program’s funds are set aside for business owners from underserved populations, such as women and minorities. The other half is open to other Iowa entrepreneurs.

Eligible businesses for LIFT loans must meet the following requirements:

  • Located in Iowa

  • For-profit business

  • The combined personal net worth of the borrowers cannot exceed $975,000

  • Existing small businesses must have annual gross sales of $2 million or less

  • Borrowers cannot be delinquent in making child support payments or any other payments due to the state

Iowa business owners can use loan funds from the LIFT program for a variety of business needs, but not for refinancing existing debt or for real estate investments. The state treasurer administers LIFT through local banks and direct lenders. If you’re interested in this program, the first step is to contact the state treasurer, who can help you find a participating lender. Loans go up to $200,000 with a maximum repayment term of five years. Interest rates cannot exceed 4% above the bank’s certificate of deposit yield rate.

4. Iowa Innovation Acceleration Fund

A good option for high-growth, technology businesses located in Iowa is the Innovation Acceleration Fund. The Iowa Economic Development Authority (IEDA) runs this program to make the state more attractive to tech companies.

In order to be eligible for an Innovation Acceleration financing, you’ll need to meet the following requirements:

  • Located in Iowa with fewer than 500 employees

  • In the advanced manufacturing, bioscience, or information technology (IT) industries

  • The product or technology must be protectable with a patent or trademark

  • The management team is fully in place

  • Proven business model, as described in a comprehensive business plan

  • Established customer base

  • Already generating significant revenue

  • Demonstrated financial and operational stability

As you can see, it’s definitely more challenging to qualify for this Iowa small business program, compared to the others we’ve described so far. However, businesses that do qualify can access up to $500,000 in funding. The funds can be structured as a loan or as a royalty that you pay back with a small portion of your previous year’s revenue.

To get started, email VentureNet Iowa to verify your eligibility and get the current application form. The application process can be pretty time-consuming. You’ll need to prepare a demo of your product or technology and present your business idea to the IEDA Technology and Commercialization Committee, which scores each applicant.

5. Iowa Demonstration Fund

The Iowa Demonstration Fund is very similar to the Innovation Acceleration Fund, helping businesses develop and bring their technologies to market. Another purpose of this fund is to make businesses more viable for venture capital funding down the line.

Eligibility criteria for the Iowa Demonstration Fund are as follows:

  • Located in Iowa with fewer than 500 employees

  • In the advanced manufacturing, bioscience, or IT industries

  • A competitive and protectable product, technology, or process

  • The product must be market-ready (except for bioscience and medical devices requiring regulatory approval)

  • Business development, financial operations, and technology management team members are in place

These loans go up to $125,000, offered as loans or royalty arrangements. IEDA reviews applications on an ongoing basis and selects companies to receive funding every two months. To apply, first email VentureNet Iowa to verify eligibility and get the current application form.

6. Iowa Proof of Commercial Relevance Program

The Iowa Proof of Commercial Relevance (POCR) program helps companies reach market readiness. Like the Innovation Acceleration Fund and Demonstration Fund, IEDA runs this small business loan program for Iowa businesses. POCR is well suited for early-stage technology companies that need funds for beta testing or market validation.

You must meet the following eligibility factors to get funding through POCR:

  • Iowa-based company with fewer than 500 employees

  • In the advanced manufacturing, bioscience, or IT industries

  • You must have a functional prototype of your technology

  • You must be seeking market validation of your products, services, or business model prior to commercial launch

  • A minimum of two co-founders must be actively engaged in the business

The POCR program offers small, low-interest business loans of up to $25,000. Keep in mind that the funds can only be used for market validation activities, such as product testing, focus groups, or competitor analysis. You can email VentureNet Iowa to verify your eligibility for POCR and get the current application form.

7. Iowa High Quality Jobs Program

The Iowa High-Quality Jobs Program also offered through IEDA, lets eligible small businesses offset some of the costs to build, expand, or improve a business facility in Iowa. Successful businesses can receive a financial assistance package, including loans, forgivable loans (essentially like a grant), tax credits, tax exemptions, and tax refunds.

Here are the eligibility criteria for the High-Quality Jobs Program:

  • Apply to the program before beginning your construction, expansion, or improvement project

  • Payments to employees must meet wage threshold requirements that are set by law

  • You must provide an employee benefits package to all full-time employees, which includes at least one of the following:

    • Business pays 70% of medical premiums for single coverage plans with a qualifying deductible;

    • Business pays 60% of medical premiums for family coverage plans with a qualifying deductible; or

    • Business pays for some level of medical and dental coverage and provides the equivalent financial value through other employee benefits

Award amounts under this program vary based on the level of the business owner’s need, availability of funding from other sources, the number of high-paying jobs created by the project, and the project’s local economic impact.

National small business loan options for Iowa businesses

Qualifying for local and state financial assistance programs is one way to get a small business loan in Iowa, but there are also several nationwide lenders who can help. These include traditional banks and online alternative lenders.

With the growth of alternative lending, seeking financing for your business requires a few clicks on your computer. Online lenders typically don’t set very stringent eligibility requirements, and they can approve and fund a loan application very quickly. Within a few days, you can have the funding you need in your bank account.

If you’re wondering how to get a small business loan in Iowa outside of state financial assistance programs, here are some nationwide lenders that you should consider:

1. Wells Fargo

Wells Fargo made it on our list of best small business lenders in Iowa because they are one of the top SBA lenders in the state. In 2017, Wells Fargo issued the largest number of SBA loans in Iowa. With some of the lowest interest rates, largest funding amounts, and longest repayment terms on the market, SBA loans should be on any entrepreneur’s list of potential funding options.

Wells Fargo has 25 branches across Iowa and is a good place to begin your SBA loan search. The bankers can help you determine if your company is eligible—as qualifying for an SBA loan can be challenging—and they can prepare you for what can be a long application process. They’ll tell you what documents you need to submit with your SBA loan application. You can qualify for up to $5 million or more in SBA funding and can put the money toward almost any business use.

2. Fundbox

Fundbox is at nearly the opposite spectrum from SBA loans. Fundbox is an online financial company that provides lines of credit for small business owners. It’s pretty easy to qualify for Fundbox. You only need to have two months of operating history under your belt and average about $50,000 in annual revenue. Fundbox doesn’t have a minimum credit score, so this is a good option for startup companies or Iowa business owners with less-than-perfect credit.

If it sounds like you qualify, Fundbox has one of the fastest application processes around. All you need to do is connect your business bank account or accounting software to Fundbox’s application, and they’ll evaluate you for credit approval. You can qualify for between $1,000 to $100,000 in financing, and you repay the funds in 12 to 24 weeks.

3. Kabbage

Kabbage is another alternative online lender. Similar to Fundbox, Kabbage has a very fast and simple application process that works by plugging into your business bank account, accounting software, or other online applications. Kabbage requires one year in business and $50,000 of annual revenue. They will check your credit during the application process, although there’s no minimum.

The advantage of Kabbage is that they provide more capital and slightly longer repayment terms than Fundbox. Their lines of credit go up to $250,000, and the repayment terms are six, 12, or 18 months long. Keep in mind that alternative lenders like Kabbage and Fundbox are much more expensive than an SBA loan or conventional bank loan, but for many business owners, the speed, convenience, and ease of qualifying are worth the cost. You also can get out of debt sooner because the repayment terms are shorter with a product like Kabbage or Fundbox.

4. Funding Circle

For a middle ground between a short-term lender like Kabbage or Fundbox and long-term SBA loans, there’s Funding Circle. Funding Circle is an online lender that offers financing between $25,000 and $500,000 that must be repaid in five or fewer years. Their loans are much more affordable than short-term loans, with interest rates starting at just 4.99% per year. However, you also need a good credit score—at least 620—to qualify, and your business must be established for two years.

If you fulfill these requirements and are searching for long-term funding that you can get quickly, Funding Circle should be on your list of Iowa business lenders. They can often fund small businesses in as few as five business days.

How to get a small business loan in Iowa: Preparing your application

Once you narrow down which Iowa business loans you want to apply to, you’ll need to prepare a strong loan application to convince lenders they should give you a loan. Documentation requirements will vary significantly based on which financial assistance program you apply for, but in general, you’ll want to focus on the following three things:

1. Business plan

Your business plan is one of the most important documents you’ll prepare when applying for an Iowa small business loan or grant program. The business plan contains a detailed summary of your business’s product or service, along with an overview of your target customer base, local and national competitors, and financial projections. Lenders and grant organizations use the business plan to determine how realistically you’ve plotted out your business’s future growth, and they might use financial projections to evaluate how much funding your business is eligible for.

2. Credit score

Depending on the loan program you apply for, your credit score could be an important factor. The better your credit score, the more loan programs you’ll be eligible for. The best ways to keep on top of your credit are to regularly monitor your credit score, fix errors in your credit report, and pay all your existing loans and credit cards on time. Improving your credit fast as possible, but it doesn’t happen overnight, so you should keep tabs on your credit history well before you begin your search for financing.

3. Business revenues

The final piece of the puzzle is business revenue. Even if you have a brand-new company, you should focus on building a market-viable product as soon as possible, so you can start generating sales. This puts your business on the map for lenders and shows them that you’re a serious business. While startup business loans do exist, it’s much easier to get a loan for an established revenue-generating business.

How to get a small business loan in Iowa: The bottom line

Fortunately for Iowans, the state offers multiple options for small business financial assistance. At the state level, the biggest opportunities are for underserved populations, such as minority and disabled entrepreneurs as well as for high-growth technology companies. Alternatively, you can obtain funding through national banks and online lenders. No matter what business you’re running, if you’re looking for a small business loan in Iowa, make sure you review what your options are from national, state, and local sources, and then choose the best fit for your business.

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Finance & Accounting

Chargeback Fraud: What Small Businesses Need to Know

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Chargeback fraud occurs when a customer disputes a credit card charge with their bank without following proper procedures or by giving reasons that are false. A chargeback is a process by which a customer requests reimbursement for a disputed credit card transaction that meets certain criteria under federal law; the merchant who received payment from the disputed transaction loses the money from the transaction and also has to pay a chargeback fee, typically $20 or more. When consumers request chargebacks for false reasons or accidentally, the impact on small businesses can add up quickly.

But small businesses can fight suspected chargeback fraud, and there are a few practices you can put into place to try to avoid chargebacks that result from simple confusion.

Nerdy tip: While illegitimate chargebacks are colloquially referred to as chargeback fraud, they often don’t quite fit the legal definition of fraud because it’s difficult to prove intent, and in some cases, the dispute might be accidental. In this article, chargeback fraud is referring broadly to all types of chargebacks that aren’t legitimate or don’t follow proper procedures.

How chargeback fraud happens

Chargebacks are a way for people to refute unauthorized transactions through their banks rather than directly with a merchant. Under federal law, there are three valid types of credit card disputes:

  1. Unauthorized use, when someone charges a person’s credit card without their permission.

  2. Billing errors, when a merchant incorrectly charges a consumer or charges them for a product they didn’t receive.

  3. Right to withhold payment, when a customer has attempted to address a complaint with the merchant but hasn’t been able to resolve the issue.

But people sometimes use these protections to circumvent merchant refund policies and get their money back for illegitimate reasons. In these cases, merchants can file a counter-dispute. Reasons that consumers commonly give for chargebacks include not receiving an item, a transaction being unauthorized or a service continuing to charge them despite their attempts to cancel. But a buyer’s actual reason might differ: Maybe they want to keep the item without paying for it, they regret making a purchase, they waited too late to return the item or they honestly forgot they made the purchase.

How it can affect small businesses

Regardless of which type of fraud occurs, when people bypass merchants to request an illegitimate chargeback, it affects small businesses in many ways.

Lost revenue

The most obvious loss is the potential profit from the product or service. With a chargeback, the customer is essentially refunded the cost of the product, which means a merchant is out an item without being paid for it.

Merchants often have to pay chargeback fees as well. When a bank processes a chargeback, they often charge the merchant a fee to penalize them for what the bank views as an illegitimate transaction. Fees can start out around $20 but can grow if a small business frequently experiences chargebacks. Small businesses are also paying the transaction fee for processing the payment, which is more money out of their cash box.

Higher risk category

A high frequency of chargebacks can lead a merchant to be labeled as a high-risk business. Small businesses that are classified as high-risk often pay higher per-transaction fees and might be canceled by their current payment processor. This can lead to a bigger cut in profit and complicate payment processing options.

What small businesses can do

Successfully disputing chargebacks is difficult, but possible. A 2021 survey of more than 400 merchants from Chargebacks911, a company that helps businesses reduce their chargebacks, found that while businesses respond to around 43% of chargebacks, an average of only 12% were recovered successfully. To improve your odds of success, try this:

Respond quickly

Chargeback responses have deadlines, and you’ll be out of options if you wait too long to respond. Gather your information and respond to the chargeback in a timely manner. But not so quickly that you overlook information. Give yourself time to be thorough.

Talk with the customer

Try to identify the issue and learn what is going on beyond what the card issuer or bank tells you in the chargeback notification. Keep the conversation friendly, and report the conversation in your documentation to the card issuer or bank to inform them of any relevant information the customer explained to you to support your case.

Prove your point

Merchants are able to write a rebuttal letter for a chargeback. If you have time, craft a letter that clearly states your evidence for why the chargeback is fraudulent and why the charge is legitimate. Keep a professional voice and provide evidence of your argument, including pictures and screenshots.

 

How to avoid chargeback fraud

Small businesses can take steps to decrease their odds of experiencing illegitimate chargebacks, including:

Ensure the charge on a statement matches your business name

Some people will report a charge as unauthorized if they do not recognize the business name on their financial statement. You can avoid this by ensuring that your business name appears correctly on transactions. If you need to update this information, contact your payment processor. If you can’t update it and it’s not identical to your business name, notify the customer within the email confirmation so they know what to expect.

Track shipments

Using tools and services that track shipments and show when a product is delivered gives you more leverage to dispute a chargeback when a customer asserts that a product was not delivered.

Make it easy to return items

By relaxing your window for returns, you make it simpler to return items for a refund. Customers might be more inclined to work with you if they know they can still return an item instead of calling their credit card issuer after a short window has passed. Making contact methods easy to locate and responding to upset customers might help the process as well.

 

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Banking

How to Get a Loan to Buy a Business

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Not everyone wants to take on the challenge of building a business from the ground up. An attractive alternative can be to step into a business that’s already up and running by purchasing it from the current owner. Some advantages of buying a business may include easier financing, an established customer base and an existing cash flow.

Buying a business is different from buying a franchise. Franchises have a set business model that’s proven to work. However, when you buy an independently operated business, it’s important to show the lender that you, your previous business experience and the business you want to buy are a winning combination.

What lenders look at when you want to buy a business

Because lenders can view the performance record of an existing business, it’s typically easier to get a loan to purchase an existing business compared with startup funding. However, your personal credit history, experience and details about the acquisition business still matter.

Your personal credit and experience

Through credit reports and credit scores, lenders are able to assess how you’ve managed debt in the past and potentially gain insights into how you will handle it in the future. Your education and experience will also be evaluated.

Solid credit history: Lenders look to see if you have a history of paying your debts. Foreclosures, bankruptcies, repossessions, charge-offs and other situations where you haven’t paid off the full amount will be noted.

Business experience: Having worked in the same industry as the business you want to purchase is helpful. Related education can also be viewed as a positive.

Other businesses you’ve owned

Having a track record of operating other successful businesses can have a positive influence on lenders when it comes to buying a new operation.

Record of generating revenue: Business financial statements can help a lender document that your current or past businesses were well-managed and turned a profit.

Positive credit record: Lenders review business credit scores and reports to verify creditworthiness and to identify liens, foreclosures, bankruptcies and late payments associated with your other businesses.

The business you want to buy

Just because a business is operating doesn’t mean it’s a good investment. Lenders will ask for documentation, often provided by the current owner, to assess the health of the operation.

Value of the business: Like you, your lender will want to ensure that you’re buying a business that has value and that you’re paying a fair price.

Past-due debts: Lenders will be interested in the business’s past-due debts, which may include liens, various types of taxes, utility bills and collection accounts.

Documentation

Most lenders will let you know what they want included in the loan application package, but there are some personal documents that are typically requested, as well as ones related to the business you want to purchase.

Personal documents

The following documents are used to evaluate your personal finances, business history and plans for operating the business after its purchase:

  • Personal tax returns.

  • Personal bank statements.

  • Financial statements for any of your other businesses.

  • Letter of intent.

Business documents

Documents from the current business owner will also be evaluated. Some common ones requested by lenders include:

  • Business tax returns.

  • Profit and loss, or P&L, statements.

  • Business balance sheet.

  • Proposed bill of sale.

  • Asking price for inventory, machinery, equipment, furniture and other items included in the sale.

Where to get a loan to buy a business

Compared with finding a loan to start a business, getting funding to buy an existing business may be easier. Here are three popular funding options to check into for a business loan:

Bank loans

Banks generally offer the lowest interest rates and best terms for business loans. To qualify for this type of loan, you’ll typically need a strong credit history, plus the existing business will need to be in operation for a certain minimum of years and generate a minimum annual revenue amount set by the lender.

SBA loans

If borrowers don’t qualify for a traditional bank loan, then SBA loans, ones partially guaranteed by the Small Business Administration, may be the next option to explore. Because there is less risk to the lender, these loans can be easier to qualify for. Banks and credit unions frequently offer SBA loans in addition to traditional bank loans.

Online business loans

Another option to consider is online business loans. Online business loans may offer more flexibility when it comes to qualification, compared with bank and SBA loans. Minimum credit score requirements can be as low as 600, and in a few cases lower. Generally, interest rates are higher than what’s available with a traditional bank loan.

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Accounts Receivable Financing: Best Options, How It Works

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Accounts receivable financing, also known as invoice financing, allows businesses to borrow capital against the value of their accounts receivable — in other words, their unpaid invoices. A lender advances a portion of the business’s outstanding invoices, in the form of a loan or line of credit, and the invoices serve as collateral on the financing.

Accounts receivable, or AR, financing can be a good option if you need funding fast for situations such as covering cash flow gaps or paying for short-term expenses. Because AR financing is self-securing, it can also be a good choice if you can’t qualify for other small-business loans.

Here’s what you need to know about how accounts receivable financing works and some of the best options for small businesses.

How Much Do You Need?

with Fundera by NerdWallet

How does accounts receivable financing work?

With accounts receivable financing, a lender advances you a percentage of the value of your receivables, potentially as much as 90%. When a customer pays their invoice, you receive the remaining percentage, minus the lender’s fees.

Accounts receivable financing fees are typically charged as a flat percentage of the invoice value, and generally range from 1% to 5%. The amount you pay in fees is based on how long it takes your customer to pay their invoice.

Here’s a breakdown of how the process works:

  1. You apply for and receive financing. Say you decide to finance a $50,000 invoice with 60-day repayment terms. You apply for accounts receivable financing and the lender approves you for an advance of 80% ($40,000).

  2. You use the funds and the lender charges fees. After receiving the financing, you use it to pay for business expenses. During this time, the lender charges a 3% fee for each week it takes your customer to pay the invoice.

  3. You collect payment from your customer. Your customer pays their invoice after three weeks. You owe the lender a $4,500 fee: 3% of the total invoice amount of $50,000 ($1,500) for each week.

  4. You repay the lender. Now that your customer has paid you, you’ll keep $5,500 and repay the lender the original advance amount, plus fees, $44,500. You paid a total of $4,500 in fees, which calculates to an approximate annual percentage rate of 65.7%.

Because accounts receivable financing companies don’t charge traditional interest, it’s important to calculate your fees into an APR to understand the true cost of borrowing. APRs on accounts receivable financing can reach as high as 79%.

Accounts receivable financing vs. factoring

Accounts receivable financing is often confused with accounts receivable factoring, which is also referred to as invoice factoring. Although AR financing and factoring are similar, there are differences.

With invoice factoring, you sell your outstanding receivables to a factoring company at a discount. The factoring company pays you a percentage of the invoice’s value, then collects payment directly from your customer. When your customer pays, the factoring company gives you the rest of the money you’re owed, minus its fees.

With accounts receivable financing, on the other hand, your invoices serve as collateral on your financing. You retain control of your receivables at all times and collect repayment from your customers. After your customer has paid their invoice, you repay what you borrowed from the lender, plus the agreed-upon fees.

Invoice factoring can be a good financing option if you don’t mind giving up control of your invoices and you can trust a factoring company to professionally collect customer payments. If you’d rather maintain control of your invoices and work directly with your customers, AR financing is likely a better option.

Best accounts receivable financing options

Accounts receivable financing is usually offered by online lenders and fintech companies, many of which specialize in this type of business funding. Certain banks offer AR financing as well.

If you’re looking for a place to start your search, here are a few of the best accounts receivable financing companies to consider.

altLINE

A division of the Southern Bank Company, altLINE is a lender that specializes in AR financing. AltLINE offers both accounts receivable financing and invoice factoring, working with small businesses in a variety of industries, including startups and those that can’t qualify for traditional loans.

AltLINE offers advances of up to 90% of the value of your invoices with fees starting at 0.50%. To get a free quote from altLINE, call a representative or fill out a brief application on the lender’s website. If you apply online, a representative will contact you within 24 hours.

AltLINE’s website also contains a range of articles for small-business owners, covering AR and invoice financing, payroll funding, cash flow management and more. AltLINE is accredited by the Better Business Bureau and is rated 4.7 out of 5 stars on Trustpilot.

1st Commercial Credit

1st Commercial Credit offers accounts receivable financing in addition to other forms of asset-based lending, such as invoice factoring, equipment financing and purchase order financing. The company works with small and medium-sized businesses, including startups and businesses with bad credit.

With 1st Commercial Credit, you can finance $10,000 to $10 million in receivables with fees ranging from 0.69% to 1.59%. You can start the application process by calling a sales representative or filling out a free quote form on the company’s website. After your application is approved, it typically takes three to five business days to set up your account, then you can receive funds within 24 hours.

1st Commercial Credit is accredited by the Better Business Bureau and has an A+ rating.

Porter Capital

Porter Capital is an alternative lender specializing in invoice factoring and accounts receivable financing. The company also has a special division, Porter Freight Funding, which is dedicated to working with businesses in the transportation industry.

With Porter Capital, you can receive an advance of 70% to 90% of your receivables and work with an account manager to customize a financing agreement that’s unique to your business. Porter funds startups and established businesses, offering fees as low as 0.75% monthly.

You can provide basic information about your business to get a free quote and receive funding in as little as 24 hours. Although Porter Capital isn’t accredited by the Better Business Bureau, it does have an A+ rating; the company also has 3.7 out of 5 stars on Trustpilot.

Additional options

Although AR financing and factoring are distinct, many companies blur the lines between the two. As you compare options, make sure you understand the type of financing a lender offers.

If you decide that invoice factoring may be a fit for your business, you might consider companies like FundThrough, Triumph Business Capital or RTS Financial.

Find and compare small-business loans

If accounts receivable financing isn’t right for you, check out NerdWallet’s list of the best small-business loans for business owners.

Our recommendations are based on the market scope and track record of lenders, the needs of business owners, and an analysis of rates and other factors, so you can make the right financing decision.

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