Traditional lines of credit, asset based lines, invoice factoring, accounts receivable financing… with so many options, it can be difficult to determine which product is right for your business. Luckily, altLINE is here to help.
With several structures and offerings to choose from, The Southern Bank’s altLINE program is well equipped to meet a company’s financing needs. More specifically, altLINE is often utilized by:
- Companies that have been declined for traditional financing due to lack of business assets, personal assets, personal credit, or operating history
- Businesses that are rapidly growing with borrowing needs that outstrip a traditional lender’s appetite
- Operators that are tired of the never-ending struggle in balancing receivables and payables
If any of these scenarios sound familiar or you’re interested in which altLINE product might fit for your business, take a look at our helpful chart below.
altLINE Financing Product Comparison
Traditional Lender
Criteria to Consider
INVOICE FACTORING
A/R FINANCING
ASSET BASED LINE
LINE OF CREDIT
Years in Business?
No operating history required. Startups and younger businesses welcome.
No operating history required. Startups and younger businesses welcome.
More than 2 years. Established operating history required.
Typically more than 2 years. Established operating history required.
Loan Amount?
$30,000 – $5,000,000
$150,000 – $5,000,000
$1,000,000 – $5,000,000
Lender dependent
Type of Business?
Business to Business
Business to Business
Business to Business
Business to Business or Business to Customer
Personal Credit?
Not a primary consideration. Approval is dependent on the credit quality of borrower’s customers.
Not a primary consideration. Approval is dependent on the credit quality of borrower’s customers.
Evaluated, but not strongly considered. Lower personal credit may increase pricing.
Evaluated and strongly considered. Will impact pricing.
Business Profitability?
Not a primary consideration. Approval is dependent on the credit quality of borrower’s customers.
Not a primary consideration. Approval is dependent on the credit quality of borrower’s customers.
Evaluated. Consistent profitability is not required.
Evaluated. Consistent profitability is typically required.
Collateral?
Accounts receivable only. 75 – 90% advance.
Accounts receivable only. 75 – 90% advance.
Primarily accounts receivable. Inventory and equipment on occasion.
Often requires real estate, equipment; minimum cash balance.
Guarantee Required?
Yes.
Yes.
Yes.
Yes.
Pricing?
Fee only. Discount fee on invoice ranging between 0.75% and 3.5%.
Fee plus interest. Low processing fee on invoice plus interest on borrowed funds.
Monitoring and interest. Monthly monitoring fee plus interest on borrowed funds.
Interest on borrowed funds plus renewal fee.
Primary Advantages?
Flexibility. Broadest credit requirements with ability to finance startups. Extremely flexible.
Flexibility and cost. Broad credit standards. Ability to borrow and access funds in more traditional manner.
Lower costs. Lower credit hurdles than a traditional line of credit. Often cheaper than Invoice Factoring and A/R Financing.
Lowest cost. Typically the cheapest form of working capital available to businesses.
Primary Disadvantages?
Pricing. Can be more expensive than other financing products. Requires client’s customers to be credit worthy.
Complexity. Not as suitable for startups or newer businesses. More complex structure benefits businesses with steady borrowing needs.
Size Restrictions. Higher credit requirements compared to Invoice Factoring and A/R Financing. Designed for businesses with larger borrowing needs.
Credit Requirements. Strict underwriting. Line size and availability of funds offered may not be sufficient to meet borrowing needs.
Financing Product Comparison: What’s Right for You?
Criteria: Years in Business?
- altLINE Invoice Factoring
- No Operating History Required. Startups and younger businesses welcome.
- altLINE A/R Financing
- No Operating History Required. Startups and younger businesses welcome.
- altLINE Asset Based Line
- More than 2 years. Established operating history required.
- Traditional Lender: Line of Credit
- Typically More than 2 years. Established operating history required.
Criteria: Loan Amount?
- altLINE Invoice Factoring
- $30,000 – $5,000,000
- altLINE A/R Financing
- $150,000 – $5,000,000
- altLINE Asset Based Line
- $1,000,000 – $5,000,000
- Traditional Lender: Line of Credit
- Lender dependent
Criteria: Type of Business?
- altLINE Invoice Factoring
- Business to Business
- altLINE A/R Financing
- Business to Business
- altLINE Asset Based Line
- Business to Business
- Traditional Lender: Line of Credit
- Business to Business or Business to Consumer
Criteria: Personal Credit?
- altLINE Invoice Factoring
- Not a Primary Consideration. Approval is dependent on the credit quality of borrower’s customers.
- altLINE A/R Financing
- Not a Primary Consideration. Approval is dependent on the credit quality of borrower’s customers.
- altLINE Asset Based Line
- Evaluated, but Not Strongly Considered. Lower personal credit may increase pricing.
- Traditional Lender: Line of Credit
- Evaluated and strongly considered. Will impact pricing.
Criteria: Business Profitability?
- altLINE Invoice Factoring
- Not a Primary Consideration. Approval is dependent on the credit quality of borrower’s customers.
- altLINE A/R Financing
- Not a Primary Consideration. Approval is dependent on the credit quality of borrower’s customers.
- altLINE Asset Based Line
- Evaluated. Consistent profitability is not required.
- Traditional Lender: Line of Credit
- Evaluated. Consistent profitability is typically required.
Criteria: Collateral?
- altLINE Invoice Factoring
- Accounts Receivable Only. 75 – 90% advance.
- altLINE A/R Financing
- Accounts Receivable Only. 75 – 90% advance.
- altLINE Asset Based Line
- Primarily Accounts Receivable. Inventory and equipment on occasion.
- Traditional Lender: Line of Credit
- Often Requires Real Estate, Equipment, Minimum Cash Balance.
Criteria: Guarantee Required?
- altLINE Invoice Factoring
- Yes.
- altLINE A/R Financing
- Yes.
- altLINE Asset Based Line
- Yes.
- Traditional Lender: Line of Credit
- Yes.
Criteria: Pricing?
- altLINE Invoice Factoring
- Fee only. Discount fee on invoice ranging between 0.75% and 3.5%.
- altLINE A/R Financing
- Fee Plus Interest. Low processing fee on invoice plus interest on borrowed funds.
- altLINE Asset Based Line
- Monitoring and Interest. Monthly monitoring fee plus interest on borrowed funds.
- Traditional Lender: Line of Credit
- Interest on borrowed funds plus renewal fee.
Criteria: Primary Advantages?
- altLINE Invoice Factoring
- Flexibility. Broadest credit requirements with ability to finance startups. Extremely flexible.
- altLINE A/R Financing
- Flexibility and Cost. Broad credit standards. Ability to borrow and access funds in more traditional manner.
- altLINE Asset Based Line
- Lower Costs. Lower credit hurdles than a traditional line of credit. Often cheaper than Invoice Factoring and A/R Financing.
- Traditional Lender: Line of Credit
- Lowest Cost. Typically the cheapest form of working capital available to businesses.
Criteria: Primary Disadvantages?
- altLINE Invoice Factoring
- Pricing. Can be more expensive than other financing products. Requires client’s customers to be credit worthy.
- altLINE A/R Financing
- Complexity. Not as suitable for startups or newer businesses. More complex structure benefits businesses with steady borrowing needs.
- altLINE Asset Based Line
- Size Restrictions. Higher credit requirements compared to Invoice Factoring and A/R Financing. Designed for businesses with larger borrowing needs.
- Traditional Lender: Line of Credit
- Credit Requirements. Strict underwriting. Line size and availability of funds offered may not be sufficient to meet borrowing needs.
