altLINE Invoice Factoring Review 2019
If your business has a cashflow issue, invoice factoring and accounts-receivable financing may be the solution. altLINE provides quick access to cash using these borrowing options, as well as through asset-based lending.
What we like:
altLINE offers a variety of financing solutions, even to new busineses with limited credit
|Factoring Amounts||altLINE-smb-1490-amountlow to altLINE-smb-1490-amounthigh|
|Minimum Credit Score||altLINE-smb-1490-mincreditscore|
- altLINE helps businesses access cash through invoice factoring, accounts-receivable financing, and asset-based lending.
- You can borrow as much as altLINE-smb-1490-amounthigh through invoice factoring.
- The minimum credit score requirement of altLINE-smb-1490-mincreditscore is very low, and there is no minimum amount of time your company must have been in business in order to qualify.
- Borrowers must pay an origination fee of altLINE-smb-1490-origfee for invoice factoring. While origination fees are common, this makes the up-front cost of accessing capital more expensive.
altLINE provides financing solutions to businesses of all sizes, ranging from startups to established enterprises.
It is a division of The Southern Bank, which has been serving customers since 1934. And this relationship is a strength, said to bank president Gates Little in correspondence with LendEDU, because it allows altLINE to lend directly to customers.
This altLINE review will help you to decide if the lender is right for your small business.
In this review:
altLINE by the numbers
|altLINE Invoice Factoring|
|Loan amounts||altLINE-smb-1490-amountlow – altLINE-smb-1490-amounthigh|
|Minimum credit score||altLINE-smb-1490-mincreditscore|
|Fees||Origination fee: altLINE-smb-1490-origfee; Invoice fee: altLINE-smb-1490-invoicefee|
What types of loans does altLINE offer?
Currently, altLINE offers three methods of business financing:
Invoice factoring allows businesses to gain access to capital quickly, rather than waiting for customers to pay their bills. With invoice factoring, companies can sell their outstanding invoices to a factoring company at a discount. Most businesses receive 70% to 90% of the invoice value upfront.
After the factor advances a percentage of the invoice to the borrowing company, the factor is paid by clients when the company’s invoice is due. The factor then forwards the rest of the money to the borrower minus any fees the factor charges.
“We’re a direct source of funds for our customers, unlike most other independent factoring companies that serve as ‘middlemen’ between their customers and whoever they’re borrowing from.Gates Little, President, The Southern Bank
Pros of invoice factoring
- Invoice factoring isn’t a traditional loan, so many companies can qualify for it even if they haven’t been in business for a long time or if the owners and company don’t have strong established credit.
- Invoice factoring is a simple way to access the money your business needs ASAP. You simply sell your accounts receivable, let the factor worry about collecting.
- Invoice factoring may be a more affordable way to secure financing than other types of business loans, especially those made available to companies with only a short business history or imperfect credit.
Cons of invoice factoring
- As with most factoring companies, borrowers will have to pay both origination and factoring fees.
- Invoice factoring fees can sometimes be higher than with other types of business loans available to established companies and owners with strong credit.
- There are some limits on which businesses will qualify since altLINE must feel confident that clients with outstanding invoices will pay.
Accounts-receivable financing allows companies to gain access to funds now by committing a portion of their accounts receivable to the funder.
While invoice factoring involves the company essentially selling its accounts receivable, which the then factor collects, accounts-receivable financing can be structured as a loan.
The big differences between invoice factoring and accounts-receivable financing structured as a loan is that with accounts-receivable financing, the company doesn’t sell the right to collect on outstanding invoices to the lender.
Instead, the company simply receives an advance based on the balances of its accounts receivable and will then work to repay that loan as its invoices are paid.
Pros of accounts-receivable financing
- Your company retains the rights to accounts receivable. It does not sell them to a factor as it does with invoice factoring, and your clients won’t need to submit payments to a new entity.
- When structured as a loan, accounts-receivable financing is usually a less costly way for your business to access capital than through invoice factoring.
Cons of accounts-receivable financing
- Your company will have to collect on the invoices, so it is more work for you.
- The cost of the loan may be more expensive than other types of business financing available to established companies and owners with strong credit histories.
Asset-based lending allows a company to qualify for a secured loan. The business pledges assets to serve as collateral for the loan, reducing risk for the lender. Many asset-based loans are structured as revolving lines of credit, so a business can access an ongoing source of capital as needed.
If your company wants ongoing access to a line of credit, asset-based lending may be better than invoice factoring or accounts-receivable financing.
This is also a better option if your business owns significant assets that can serve as collateral, it doesn’t have a large balance in accounts receivable.
Pros of asset-based lending
- You can draw from a line of credit as needed.
- You can qualify even if you don’t have much in outstanding invoices from creditworthy clients.
- The costs of a loan obtained through asset-based lending may be more affordable.
Cons of asset-based lending
- Asset-based lending is possible only if your company has sufficient assets.
- You will put the collateral at risk if you’re unable to repay what you owe.
altLINE Eligibility & Application
AltLINE’s eligibility requirements are relatively easy to meet:
- Minimum credit score: altLINE-smb-1490-mincreditscore
- Minimum time in business: altLINE-smb-1490-mintimeinbusiness_a
- Minimum annual business revenue: altLINE-smb-1490-minbusinessrevenue_a
Business that apply for financing from altLINE can often get fast and affordable access to working capital thanks to altLINE’s relationship with the Southern Bank and the fact that it provides funds directly rather than acting as a middle man.
Small- or medium-sized businesses with outstanding invoices are the ideal borrowers for altLINE. Companies in the growth stage can especially benefit from access to funds via invoice factoring, as can businesses that don’t have the bandwidth to try to collect on unpaid invoices.
When you apply, you’ll also need to supply requested information about the clients named on your invoices. altLINE will need to examine these businesses and their ability to pay their bills on time before approving your application.
If you’re not sure if altLINE is right for you, you have other options, too. Compare what altLINE offers with other small-business lenders, including Fundbox or Bluevine, to find loan terms and factoring fees that fit your budget.
You can also check out your guide to merchant cash advances for small businesses if you regularly process credit card transactions, or startup business loans if you’re interested in looking at a broader range of loan options.