Telecom Financing - Options For Funding Your Small Business

The telecommunications business is one of today’s most dynamic industries. With broadband technologies that are changing daily, new Internet voiceover protocols, complicated optical networks, and new wireless technologies, starting a telecom company is a challenge. So, too, is financing. Read on to find out how to overcome this challenge.

The telecommunications business is one of today’s most dynamic industries. With broadband technologies that are changing daily, new Internet voiceover protocols, complicated optical networks, and new wireless technologies, it is a challenging field to start a business in. Unfortunately, telecom financing can also be difficult.

The telecom industry has connected the industrialized world with instantaneous communication options. It is an extremely competitive field, with new companies breaking in constantly to meet consumer needs. For a number of reasons, it can be hard for these small businesses to get the funding they need.

Complexities of The Telecom Industry

The telecom industry is more complex than most, leaving small businesses with limited financing options. This complexity can scare off traditional lenders, whose experience is in lending to retailers and manufacturers with static technology. When it comes to telecommunications, these lenders tend to be considerably more cautious. These technologies change rapidly, which is risky for lenders. Without expertise in this area, they cannot determine whether your company’s business model is lucrative or not.

The Receivables Time Lag

Billing turnaround time for the telecom industry can take several weeks, which is a major stumbling block for lenders. This means that once services are offered, it can take a while to receive payment. It can be difficult for traditional lenders to understand this billing structure, rather than an instant exchange of receivables for services. So often they are reluctant to lend to these small companies. Without specialized knowledge about the telecommunications industry, these lenders are not likely to accept the risk and deal with the unfamiliar.

Where to Find Financing For a Small Telecommunications Business

Small telecoms must turn to experienced companies that specialize in this particular industry for financing. After all, you want a lender who understands what you do and how your finances work.

Using a telecom financing expert can be the best way to find a lender. They will research your business and goals to find a lender that suits your particular needs. Then they assist you in using your assets in the most beneficial way as collateral, which lenders require for financing. Telecom experts understand the value of a diverse range of technologies, as well as which are gaining value or depreciating. It is essential for your creditors to understand these issues.

Proper telecom financing is the only way to expand your company and offer your services to a growing customer base. While your options may initially seem limited, telecom financing is available for your business, no matter how small. Instead of wasting time and resources with traditional lenders who do not understand your industry, look for professionals in the field, who can help you find the funds you need from the right lender.