Small-to-medium sized companies have always found it difficult financing for their business.  The problem is most small businesses never have enough capital or cash flow to keep their business moving in an upward motion. 

In the current economic downturn, more and more small businesses are struggling.  Lenders are hesitant to give out funds to what many insiders call unsafe investments, which leaves the small business owner with limited options.

Finding investors is an option, however; having to give up any part of your company may not be what you have in mind.  Finding a business loan is next to impossible because of strict underwriting guidelines.  Most lending companies want the business to have flawless financials, solid resources and a few years of positive working experience.

Another alternative would be invoice factoring, which allows you to sell your invoices to a factoring company and, in return, the factoring company pays a percentage in advance.  Invoice financing is easy to obtain with very few qualifications.  Your company cannot have any liens or judgments attached to it and your customers must have rock-solid track records.

Once you have passed the minimum qualifications process, the factoring company will purchase your invoices and pay you in instalments.  The first instalment would more than likely be 80 per cent of the invoice in advance.  The second instalment of 20 per cent, minus the finance fees, will be paid once the customer has paid the invoice in full.