Go green with renewable energy financing companies
Many firms can struggle to obtain working capital to sustain and grow their businesses but this is particularly true if your business is in a new industry such as green or renewable energy production. Yet without sufficient funding, alternative energy companies can struggle to advance.
Banks can be slow to lend business loans to these new industry firms. In addition to being bureaucratic, loans require complicated and time-consuming application processes. Moreover, these lending institutions are reluctant to work with new or unestablished companies that have yet to prove themselves. In this more rigid lending environment, banks are less likely to give an untried, higher risk green energy company a chance.Read More
Financing alternative energy firms in the face of risk
Alternative energy companies with current creditworthy customers can take advantage of energy factoring. Rather than waiting to collect payment from customers, they can sell these same invoices to renewable energy financing firms at a discount. By collecting their payment as an advance right away, they can then have the working capital they need to sustain their business.
Renewable energy financing from an invoice factoring company offers a number of benefits to both established and less established alternative energy firms. There are also many factoring programs for renewable energy contractors. The benefits of factoring include:
Strengthen your business cash flow or cash reserves
Purchase or lease new renewable energy equipment, devices or machinery
Better invest in advertising and marketing campaigns to promote the company and its green energy products
Cover large expenses associated with developing, testing and producing alternative energy
Costs of scientific experiments and testing
Pay down ordinary bills such as overhead, payroll, and other operations expenses
So why are factoring companies willing to offer financing for renewable energy projects despite the higher risk involved? These energy factoring firms are willing to take on the risk because this means the reward will be greater as well. Most banks and other lending firms shy away from calculated risk despite the rewards because of regulations and conservative policies. Banks tend to prefer to lend to more established industries, which may leave those in these new green energy firms out in the cold.
Green energy firms that can take advantage of renewable energy factoring companies, including:
Solar energy companies, such as those that manufacture solar panels, build them and install them
Carbon offset firms
Windmill manufacturers and builders
Hydroelectric power stations and turbines
Geothermal power plant
Industrial biomass production firms
Get the greens to go green with renewable energy factoring
Energy factoring companies believe financing alternative energy projects should be an uncomplicated process. Credit-worthy customers are all an alternative energy company or project needs in order to qualify for fast renewable energy financing. Some firms may specialize in financing alternative energy while others will provide funding to both alternative and traditional energy enterprises.
Terms for renewable energy factoring will vary from company to company. An advance on the invoice is generally 80-90 percent of its value is standard. The fees charged by renewable energy factoring help cover the factor in case of non-payment. Factoring is a higher risk undertaking than business loans thus the costs associated with financing renewable energy projects is higher.
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