Specialty Finance Loans

Specialty Finance Loans are loans that are tailored to specific needs or collateral and may be offered by banks, asset based lenders, or specialized lenders. These loans may include factoring, purchase order financing, trade finance, bankruptcy loans, or even more specialized loans such as the financing of taxi cab medallions. In general, these loans provide financing that would, otherwise, be unavailable. They usually entail higher advance rates, and higher interest rates and fees. Factoring is a form of financing in which you sell your receivables to the lender on either a recourse or non-recourse basis. Recourse essentially means that the business guaranties the payment of an account. Non-recourse means the lender assumes the risk of collection. Factorers (or Factoring lenders) can often advance a higher percentage of the account receivable than other lenders; however, it is more expensive and not always suitable. Certain industries such as textiles and furniture rely extensively on factoring. Purchase order financing is increasingly difficult to obtain and expensive, but it can enable you to secure financing for a large order. Trade finance can involve documentary letters of credit, foreign exchange, and loans that are guaranteed by the Export Import bank. This financing is usually provided by specialized areas of a bank. Bankruptcy loans come in many forms and from a variety of bank and non-bank sources.