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Telecom lending has never been a tougher game than it is right now. As if getting a telecommunications company off the ground weren't difficult enough, it's become nearly impossible to secure funding. Funding has always been a problem for small companies in this industry, and with the current economic climate, it's not getting any easier. Telecom lending is harder to secure than any other type of funding. The Trouble With Telecom Lending It's never been easy to get telecom lending. Banks consider the telecommunications industry risky, and for that reason they're wary of lending to these small companies. In general, banks are the most conservative lenders in the world. They consider risk a major factor when dealing with anyone. On the other hand, the telecommunications industry is a dynamic world that changes day by day. With their conservative mindset, banks can't keep up with the changes and they're not willing to risk it. The reason why it's a "high risk" industry is that companies have no assets to use as collateral. This is how banks and traditional lenders work. They look at what assets you have, which they could claim in case you were to default on your loan. Future profits count very little in these considerations. When looking at a small start-up IT company, for example, they don't see anything equitable that they could use if the debtor defaulted. You may have an assured customer base and the industry might be booming, but that's not enough for them. Of course, there are other sources of funding. Private lending companies fill in the gaps for industries that banks won't touch, and they can often offer more flexible terms. However, with the recent crash in the telecommunications industry where several major companies failed, this game has become much riskier. These recent events have made it much tougher to get the funds small businesses need from these sources. In order to secure any kind of funding by traditional means, you must have flawless service and almost perfect up-time to show them that you're risk-free. Invoice Factoring A new source of funding for telecom lending is invoice factoring. This is an ideal system for an industry that doesn't have lots of assets, but is assured future profits. What this means is selling your unpaid invoices to a third party, which then goes about collecting the money and dealing with your debtors. This third party is usually a company that specializes in invoice factoring. The way it works is that the factoring company buys your unpaid invoices at a majority of its total value. They give you the money right now, as soon as the transaction occurs. Once this is done, they go about collecting the money themselves, and at the end of the invoice's term, they give you the rest of the balance. In this way, you eventually receive the total due minus a small transaction fee, and you don't have to wait until the bill is due. The great advantage of this form of telecom lending is that it gives you funds you need right away. You no longer have to wait for the bill to come due, or chase after clients who haven't paid. It also offers an alternative form of funding for an alternative type of industry. With telecom lending getting increasingly difficult to secure, invoice factoring offers a great way to give small businesses the money they need to operate today. Choose a reputable telecom lending company that is known for reliable and effective service. For more information, visit http://www.thermocredit.com
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