Best online invoice financing lenders in the us is easier to understand when you have clear, practical guidance. This guide explains key costs, approval criteria, timelines, and lender expectations so you can compare options and choose the right path for your situation.

What is Invoice Financing and How Does it Work?

Invoice financing is a financial arrangement that allows businesses to borrow money against their unpaid invoices. It provides immediate cash flow without waiting for customers to pay, making it vital for maintaining liquidity in operations.

Definition of Invoice Financing

Invoice financing is a method that businesses use to access cash quickly by leveraging outstanding invoices. Rather than waiting for customers to settle their accounts, companies can receive a percentage of the invoice amount upfront. This solution is popular among small and medium-sized enterprises facing cash flow challenges.

How Invoice Financing Works

The process of invoice financing typically begins with a business submitting its unpaid invoices to a lender. The lender then advances a portion of the invoice value, usually between 70% to 90%, allowing the business to access funds immediately. Once the customer pays the invoice, the lender deducts its fees and returns the remaining balance to the business.

Benefits of Invoice Financing

Invoice financing offers several benefits, including improved cash flow, flexibility in funding, and minimal paperwork. Businesses can quickly address financial gaps, invest in growth opportunities, and manage operational costs without lengthy application processes or credit checks, making it an appealing option for many.

Why Should You Consider Online Invoice Financing?

Online invoice financing provides several advantages over traditional financing methods, including faster access to cash, greater flexibility, and a simplified application process that reduces administrative burdens for businesses.

Speed of Access to Cash

One of the most compelling reasons to consider online invoice financing is the speed at which funds can be accessed. Many online lenders can approve applications and disburse funds within 24 hours, allowing businesses to address immediate cash flow needs quickly. This rapid turnaround is especially beneficial for companies facing unexpected expenses or urgent operational costs.

Flexibility and Convenience

Online invoice financing offers significant flexibility, allowing businesses to choose which invoices to finance based on their cash flow needs. This convenience enables companies to tailor their financing solutions according to varying operational demands without being locked into a long-term agreement.

Less Paperwork

Compared to traditional bank loans, online invoice financing typically requires much less paperwork. Many lenders have streamlined the application process, allowing businesses to submit invoices electronically and receive funding without extensive documentation. This efficiency is particularly advantageous for small businesses lacking dedicated administrative resources.

What Are the Types of Online Invoice Financing?

There are several types of online invoice financing available, including invoice factoring, invoice discounting, and lines of credit. Each offers unique benefits and is suited to different business needs.

Invoice Factoring

Invoice factoring involves selling your unpaid invoices to a third-party lender at a discount. The lender then takes responsibility for collecting payment from your customers. This type of financing provides immediate cash flow but can affect customer relationships since the lender interacts directly with your clients.

Invoice Discounting

In invoice discounting, the business retains control over its sales ledger and continues to collect payments from customers. The lender provides an advance on the invoice amount, and once the invoice is settled, the remaining balance, minus the lender’s fees, is returned to the business. This option preserves customer relationships while providing liquidity.

Lines of Credit

A line of credit against invoices allows businesses to draw funds as needed up to a certain limit. This flexible financing option enables businesses to manage cash flow fluctuations without having to finance specific invoices. It’s particularly useful for companies with variable revenue streams or seasonal cash flow challenges.

How Do You Choose the Right Lender for Invoice Financing?

Choosing the right lender for invoice financing involves assessing your business needs, evaluating the lender’s reputation, and comparing their fees and rates to ensure you get the best terms possible.

Assessing Your Business Needs

The first step in choosing a lender is to assess your specific business needs. Consider how much financing you require, the frequency of your cash flow needs, and your business’s growth aspirations. Aligning your financing options with your strategic objectives is crucial for long-term success.

Evaluating Lender Reputation

Researching the reputation of potential lenders is essential. Look for customer reviews, industry ratings, and testimonials to gauge their reliability and customer service quality. A reputable lender will have a proven track record and transparent practices, which can minimize potential pitfalls in your financing experience.

Comparing Fees and Rates

Different lenders have varying fee structures and rates, so it’s vital to compare these elements before making a decision. Look for hidden fees, such as application or maintenance fees, and ensure you understand the total cost of financing. A clear breakdown of all costs can help you avoid unexpected expenses down the line.

What Are the Top Online Invoice Financing Lenders in the US?

The US market has several leading online invoice financing lenders, each offering distinct features, competitive rates, and varying eligibility criteria. Understanding their offerings can aid in selecting the most suitable option for your business.

Overview of Leading Lenders

Some of the top online invoice financing lenders in the US include BlueVine, Fundbox, and MarketInvoice. These lenders provide diverse financing solutions tailored to small and medium-sized businesses, often emphasizing quick approvals and flexible terms to meet the varying needs of borrowers.

Market Share and Positioning

Leading lenders typically have significant market shares, reflecting their established reputations and customer bases. For instance, BlueVine is known for its rapid funding process and competitive rates, making it a popular choice among small businesses seeking invoice financing solutions.

Unique Features of Each Lender

Each lender may offer unique features that cater to specific business needs. For example, Fundbox may provide a user-friendly online platform with advanced analytics, while MarketInvoice might focus on larger invoice amounts with a more extensive funding capacity. Understanding these attributes can help businesses select the right lender.

What Are the Eligibility Requirements for Invoice Financing?

Eligibility requirements for invoice financing can vary by lender but generally include aspects such as business type and size, credit score, and revenue requirements that assess your business’s financial health and ability to repay the financing.

Business Type and Size

Most lenders prefer to work with established businesses that have a minimum revenue threshold. Typically, businesses should be generating significant monthly revenue and operating for at least six months. Understanding your lender’s specific requirements can help streamline the application process.

Credit Score Considerations

While invoice financing is generally more accessible than traditional loans, lenders will still consider your credit score. A higher credit score can improve your chances of approval and result in better terms, so maintaining a good credit profile is beneficial for potential borrowers.

Revenue Requirements

Many lenders impose minimum revenue requirements, usually ranging from $50,000 to $100,000 annually, to ensure that businesses can repay the financing. These thresholds can vary significantly based on the lender’s risk assessment criteria, so it’s essential to check specific terms before applying.

How Does the Application Process Work?

The application process for invoice financing is generally straightforward and involves a few key steps, including submitting an application, providing required documentation, and understanding the approval timeline, which can vary by lender.

Step-by-Step Application Guide

To apply for invoice financing, start by selecting a lender and completing their application form. This typically includes basic business information, financial statements, and details about your outstanding invoices. Once submitted, the lender will review your application and invoices to determine eligibility.

Required Documentation

Common documentation required includes recent bank statements, financial statements, and a list of outstanding invoices. Providing accurate and comprehensive documentation can expedite the approval process and enhance your chances of securing financing.

Approval Timeline

The timeline for approval can vary widely depending on the lender. Some online lenders can offer same-day approvals, while others may take several days. Understanding the typical approval time for your chosen lender can help you plan your cash flow needs accordingly.

What Fees Should You Expect with Online Invoice Financing?

When considering online invoice financing, it’s crucial to understand the various fees involved, including typical costs, discount rates, and potential hidden fees that can impact the overall cost of financing.

Typical Costs Involved

Typical costs in invoice financing include a percentage of the invoice value, known as the discount rate, which can range from 1% to 5%. Additionally, there may be service fees, which cover administrative costs associated with processing the financing. Understanding these costs can help businesses estimate their financing expenses accurately.

Understanding Discount Rates

The discount rate is a key factor in determining how much a business will ultimately receive from its invoices. This rate is typically influenced by the invoice’s age, the creditworthiness of the customer, and the lender’s risk assessment. Being aware of how discount rates are calculated can help businesses make informed decisions.

Hidden Fees to Watch Out For

Businesses should be cautious of hidden fees that may not be immediately apparent. These can include application fees, maintenance fees, or charges for late payments. Always request a detailed breakdown of all potential costs before entering into an agreement with a lender.

How Do Interest Rates Work in Invoice Financing?

Interest rates in invoice financing can vary based on several factors, including the lender’s policies, the borrower’s creditworthiness, and the specifics of the invoice being financed, such as its age and the customer’s payment history.

Factors Affecting Interest Rates

Several factors influence interest rates in invoice financing. These include the business’s credit score, the invoice’s age, the client’s payment history, and the overall economic conditions. Lenders assess these elements to determine the risk associated with financing your invoices.

Comparing Fixed vs. Variable Rates

Invoice financing may offer both fixed and variable rates. Fixed rates provide predictability in costs, while variable rates can change based on market conditions. Understanding the implications of each rate type can help businesses select a financing option that aligns with their financial strategies.

Calculating the Total Cost

Calculating the total cost of invoice financing involves considering the discount rate, any additional fees, and the duration of the financing. Businesses should conduct a thorough cost analysis to ensure they understand the overall financial impact of the financing arrangement before proceeding.

What Are the Risks of Invoice Financing?

While invoice financing can be beneficial, it also carries risks that borrowers should be aware of, including the potential for a debt cycle, impacts on customer relationships, and concerns about overall financial stability.

Potential for Debt Cycle

One significant risk of relying heavily on invoice financing is the potential for a debt cycle, where businesses become dependent on financing to manage cash flow. This reliance can limit growth opportunities and lead to a precarious financial situation if invoices are not paid on time.

Impact on Customer Relationships

When using invoice factoring, the lender may contact your customers to collect payment. This can create friction in customer relationships, especially if clients are unaware of the arrangement. Maintaining clear communication with clients is crucial to mitigate any potential negative impacts.

Financial Stability Concerns

Relying on invoice financing can raise concerns about a business’s financial stability. If a company continually requires financing to cover operational costs, it may indicate deeper underlying issues. Addressing these issues through improved cash flow management is essential for long-term success.

How Can You Improve Your Chances of Getting Approved?

Improving your chances of getting approved for invoice financing involves strengthening your business profile, maintaining good credit, and ensuring that invoices provided are accurate and reflect reliable customer payment histories.

Strengthening Your Business Profile

A strong business profile can enhance your chances of securing invoice financing. This includes maintaining a solid reputation, showcasing consistent revenue growth, and having a clear business plan. These elements demonstrate to lenders that your business is a low-risk investment.

Maintaining Good Credit

Maintaining a good credit score is vital for securing favorable financing terms. This can be achieved by paying bills on time, reducing outstanding debts, and managing credit utilization effectively. A higher credit score not only improves your chances of approval but can also lead to lower costs of financing.

Providing Accurate Invoices

Ensuring that invoices are accurate and reflect the agreed-upon terms is crucial. Lenders will assess the quality of your invoices, so discrepancies can lead to delays or denials in financing. Double-checking invoices for correctness can streamline the approval process significantly.

What Should You Avoid When Choosing an Invoice Financing Lender?

Avoiding common pitfalls when choosing an invoice financing lender is essential to ensure a positive financing experience. Key considerations include not overlooking terms and conditions, ignoring customer reviews, and failing to understand the fine print in agreements.

Overlooking Terms and Conditions

Failing to read the terms and conditions carefully can lead to unexpected costs or unfavorable terms. Businesses should take the time to understand all aspects of the financing agreement, including fees, interest rates, and any potential penalties for late payments.

Ignoring Customer Reviews

Customer reviews provide valuable insights into a lender’s reliability and service quality. Ignoring these reviews may lead you to select a lender with poor customer service or hidden fees. Researching and reading client testimonials can guide you toward reputable lenders.

Not Understanding the Fine Print

The fine print of a financing agreement often contains crucial information regarding fees, repayment terms, and lender obligations. Not understanding these details can result in costly mistakes. Always seek clarification on any unclear terms before signing an agreement.

How Do Lenders Evaluate Your Invoices?

Lenders evaluate invoices through a verification process that assesses the legitimacy of the invoices, the creditworthiness of clients, and the age of the invoices to determine the risk associated with financing them.

Invoice Verification Process

The invoice verification process typically involves checking the legitimacy of the invoices submitted. Lenders will confirm details such as the invoice amount, due date, and the validity of the buyer’s information. A thorough verification process helps mitigate the risk of fraud.

Assessing Client Creditworthiness

Lenders will also evaluate the creditworthiness of your clients, as this impacts the likelihood of timely payment. Factors such as the client’s credit history, financial stability, and payment patterns are considered. A strong client base with reliable payment histories enhances your chances of obtaining financing.

Evaluating Invoice Age

The age of your invoices is a critical factor in the evaluation process. Lenders prefer to finance newer invoices, as older invoices pose a higher risk of non-payment. Keeping your invoicing process efficient and timely can help improve your chances of securing financing.

What Are the Alternatives to Invoice Financing?

Alternatives to invoice financing include traditional bank loans, merchant cash advances, and crowdfunding options. Each alternative has its advantages and disadvantages, depending on your business needs and financial circumstances.

Traditional Bank Loans

Traditional bank loans offer a more structured financing option, typically with lower interest rates compared to invoice financing. However, the application process can be lengthy and may require extensive documentation, making it less flexible for urgent cash flow needs.

Merchant Cash Advances

Merchant cash advances provide quick access to funds based on future credit card sales. While they offer rapid funding, they often come with high fees and interest rates, which can make them an expensive option for businesses relying on consistent cash flow.

Crowdfunding Options

Crowdfunding allows businesses to raise capital from a large number of investors through online platforms. This method can be effective for startups and innovative projects but may not provide immediate cash flow solutions. It also requires a compelling business case to attract potential investors.

How Does Invoice Financing Affect Your Cash Flow?

Invoice financing positively impacts cash flow by providing immediate access to funds that can be used for operational expenses, growth initiatives, or bridging seasonal cash flow gaps, thus ensuring smooth business operations.

Immediate Cash Benefits

By converting unpaid invoices into immediate cash, businesses can manage expenses more effectively and take advantage of growth opportunities. This immediate liquidity helps maintain operational stability, especially during peak demand periods when cash flow is critical.

Long-term Financial Planning

Effective use of invoice financing can facilitate better long-term financial planning. By ensuring a steady cash flow, businesses can allocate resources more efficiently, invest in new projects, and navigate seasonal fluctuations without resorting to high-interest debt.

Impact on Operations

Invoice financing can significantly impact business operations by providing the necessary liquidity to manage day-to-day expenses, pay suppliers promptly, and maintain workforce stability. This operational continuity is essential for sustaining growth and ensuring long-term success.

What Are Customer Experiences with Online Invoice Financing?

Understanding customer experiences with online invoice financing can provide valuable insights into the overall effectiveness of lenders and the usability of their platforms, revealing both positive testimonials and common complaints.

Positive Testimonials

Many customers report positive experiences with online invoice financing, highlighting quick access to funds, user-friendly platforms, and responsive customer service. These testimonials often emphasize how invoice financing has helped businesses overcome cash flow challenges and seize growth opportunities.

Common Complaints

Despite the benefits, some customers express concerns regarding high fees, unexpected costs, and communication issues with lenders. Addressing these complaints can help lenders improve their services while managing customer expectations effectively.

Case Studies

Case studies can illustrate the successful use of invoice financing in various industries. For instance, a small manufacturing business may share how invoice financing enabled them to purchase raw materials upfront, leading to increased production capacity and revenue growth. Such examples can motivate other businesses to explore invoice financing options.

How Can You Use Invoice Financing Strategically?

Businesses can use invoice financing strategically to fund growth initiatives, bridge seasonal cash flow gaps, and manage unexpected expenses, thereby optimizing their financial operations and enhancing overall resilience.

Funding Growth Initiatives

Invoice financing can be a powerful tool for funding growth initiatives, such as expanding product lines, entering new markets, or investing in marketing campaigns. By accessing immediate cash, businesses can pursue opportunities that may otherwise be delayed due to cash constraints.

Bridging Seasonal Cash Flow Gaps

For businesses that experience seasonal fluctuations, invoice financing can help bridge cash flow gaps during lean periods. This flexibility ensures that operational costs are covered, allowing companies to maintain stability and prepare for peak seasons without financial strain.

Managing Unexpected Expenses

Unexpected expenses can arise at any time, and having access to invoice financing can provide the necessary funds to address these challenges promptly. This capability enhances a business’s ability to respond to emergencies without jeopardizing cash flow or operational continuity.

What Are the Tax Implications of Invoice Financing?

The tax implications of invoice financing can affect how businesses report their income and expenses, including tax deductions on fees, impacts on revenue reporting, and navigating tax regulations related to financing arrangements.

Tax Deductions on Fees

Businesses can typically deduct fees associated with invoice financing as a business expense, which can reduce taxable income. Understanding the specifics of tax deductions can help business owners optimize their financial reporting and minimize their tax liabilities.

Impact on Revenue Reporting

Invoice financing can impact how businesses report revenue, as cash received from financed invoices may be recognized differently compared to standard payment terms. Accurate record-keeping is essential to ensure compliance with accounting standards and tax regulations.

Navigating Tax Regulations

Businesses should consult with tax professionals to navigate the complexities of tax regulations related to invoice financing. Staying informed about current tax laws can help businesses maximize deductions and avoid potential pitfalls in reporting income and expenses.

How Do Economic Conditions Affect Invoice Financing?

Economic conditions can significantly influence invoice financing, affecting interest rates, market demand for financing, and lender risk assessments, which all play roles in the availability and cost of financing options.

Impact of Recession

During economic downturns, lenders may tighten their lending criteria, making it more challenging for businesses to secure invoice financing. In such environments, understanding the economic landscape can help businesses prepare and adapt their financing strategies accordingly.

Interest Rate Trends

Interest rates can fluctuate based on broader economic conditions, impacting the cost of invoice financing. Businesses should monitor interest rate trends to make timely financing decisions and lock in favorable rates when possible.

Market Demand for Financing

Economic conditions also affect the overall market demand for financing. In uncertain economic climates, businesses may seek financing more aggressively to safeguard cash flow, leading to increased competition among lenders, which can impact terms and availability.

What Technologies Are Used in Online Invoice Financing?

Advancements in technology have transformed online invoice financing, enabling automation tools, enhancing data security measures, and improving user experience features that streamline the financing process.

Automation Tools

Many online lenders utilize automation tools to expedite the application and approval process. These technologies can quickly assess creditworthiness, verify invoices, and manage transactions, significantly reducing the time businesses spend securing financing.

Data Security Measures

Data security is crucial in online invoice financing, as sensitive financial information is exchanged. Lenders typically implement robust security measures, including encryption and secure access protocols, to protect both businesses and their clients from data breaches and fraud.

User Experience Features

User experience features, such as intuitive dashboards and mobile accessibility, enhance the overall borrowing experience. Lenders that prioritize user-friendly interfaces enable businesses to manage their financing easily, track invoices, and access funds swiftly.

How Do Small Businesses Benefit from Invoice Financing?

Small businesses can reap significant benefits from invoice financing, including access to quick cash, improved business operations, and reduced financial stress, allowing them to thrive in competitive markets.

Access to Quick Cash

For small businesses, quick access to cash can be a game-changer. Invoice financing allows them to overcome cash flow challenges and meet operational needs without the delays associated with traditional financing methods. This immediate liquidity supports business continuity and growth.

Improved Business Operations

With invoice financing, small businesses can streamline their operations by ensuring they have the necessary funds to manage day-to-day expenses. This stability enables them to focus on core activities, such as customer service and product development, rather than financial constraints.

Reduced Financial Stress

Invoice financing can significantly reduce financial stress for small business owners, who often juggle multiple responsibilities. By providing a reliable cash flow solution, businesses can manage their finances with more confidence and alleviate the pressure of meeting operational costs.

What Is the Future of Invoice Financing?

The future of invoice financing looks promising, with trends indicating increased technological integration, evolving market demands, and potential regulatory changes that will shape the industry landscape.

Trends in the Industry

Key trends in the invoice financing industry include the rise of fintech solutions, which leverage technology to provide faster and more accessible financing options. This trend is likely to continue as businesses increasingly seek efficient financial solutions tailored to their needs.

Technological Innovations

As technology advances, we may see innovations such as blockchain integration for invoice verification and digital identity authentication, enhancing security and efficiency. These innovations can streamline the invoice financing process and improve transparency for all parties involved.

Regulatory Changes

Potential regulatory changes may also impact the invoice financing landscape, with increased scrutiny on lending practices and consumer protections. Staying informed about these changes is essential for businesses and lenders alike to ensure compliance and adapt to new requirements.

How Can You Maximize Your Invoice Financing Experience?

To maximize your invoice financing experience, regularly review terms, build strong relationships with lenders, and stay informed about market changes that could impact your financing options and strategies.

Regularly Reviewing Terms

Regularly reviewing the terms of your financing agreement can help you identify opportunities for better rates or fees. This proactive approach allows businesses to negotiate terms with lenders and ensure they are getting the best deal available based on their financial health.

Building Relationships with Lenders

Establishing strong relationships with lenders can lead to better financing terms and more responsive service. Open communication and transparency about your business needs and challenges can foster trust and facilitate smoother transactions.

Staying Informed on Market Changes

Keeping abreast of market changes, trends, and economic conditions can empower businesses to make informed financing decisions. Understanding the broader financial landscape enables businesses to adapt their strategies and seize opportunities as they arise.

What Are Common Myths About Invoice Financing?

Several common myths surrounding invoice financing can cloud understanding, including misconceptions about costs, accessibility, and suitability for different business sizes.

Misconceptions About Costs

One prevalent myth is that invoice financing is prohibitively expensive. While costs can vary, many businesses find that the benefits of immediate cash flow outweigh the fees involved. It’s essential to conduct thorough cost analyses to dispel these misconceptions.

Beliefs About Accessibility

Some entrepreneurs believe that invoice financing is only available to larger businesses. In reality, many online lenders cater specifically to small and medium-sized enterprises, making this financing option accessible to a broader audience.

Assumptions About Business Size

Another common assumption is that invoice financing is unsuitable for startups. However, many lenders consider various factors beyond business size, such as revenue and invoice quality, allowing startups to leverage this financing option effectively.

How Can You Educate Yourself About Invoice Financing?

Educating yourself about invoice financing involves leveraging resources for learning, industry publications, and networking opportunities that can enhance your understanding of financing options and best practices.

Resources for Learning

Numerous online resources, including blogs, webinars, and e-books, are available to help businesses learn about invoice financing. These resources provide valuable insights into the pros and cons of financing, helping business owners make informed decisions.

Industry Publications and Blogs

Industry-specific publications and blogs often offer expert opinions, case studies, and best practices related to invoice financing. Regularly reading these materials can keep businesses informed about the latest trends and developments in the financing landscape.

Networking Opportunities

Attending industry conferences and networking events can provide valuable opportunities to connect with finance professionals and other business owners. These interactions can facilitate knowledge sharing and foster relationships that lead to new financing opportunities.

What Are the Best Practices for Managing Invoice Financing?

Managing invoice financing effectively involves monitoring cash flow, maintaining regular communication with lenders, and keeping accurate records of transactions to ensure smooth operations and compliance with agreements.

Monitoring Cash Flow

Regularly monitoring cash flow is critical for businesses using invoice financing. This practice helps identify patterns in income and expenses, allowing businesses to make informed decisions about financing needs and operational adjustments in real-time.

Regular Communication with Lenders

Maintaining open lines of communication with lenders can enhance the financing experience. Regular updates on your business’s financial health and any changes in cash flow needs can foster a collaborative relationship that benefits both parties.

Maintaining Accurate Records

Keeping accurate records of invoices, payments, and financing agreements is essential for compliance and effective financial management. Proper record-keeping ensures that businesses can track their financing activities and prepare for any audits or inquiries from lenders.

What Are the Key Takeaways About Invoice Financing?

In summary, invoice financing provides businesses with quick access to cash, flexibility in managing cash flow, and various options to suit different needs. However, understanding the associated costs, risks, and best practices is vital for maximizing the benefits of this financing solution.

Summary of Benefits

The primary benefits of invoice financing include immediate cash flow, reduced financial stress, and the ability to focus on growth initiatives. By leveraging unpaid invoices, businesses can maintain operational stability and seize opportunities as they arise.

Important Considerations

When considering invoice financing, businesses should carefully assess their needs, evaluate lender options, and understand the costs involved. Conducting thorough research and seeking expert advice can lead to better financing outcomes.

Final Recommendations

To make the most of invoice financing, businesses should stay informed about market trends, maintain strong relationships with lenders, and continuously review their financing strategies. This proactive approach can enhance long-term financial health and operational success.

Mini FAQ

What is invoice financing? It is a financial arrangement that allows businesses to borrow money against their unpaid invoices for immediate cash flow.

What types of invoice financing are available? The main types include invoice factoring, invoice discounting, and lines of credit.

How do I choose the right lender? Assess your business needs, evaluate lender reputation, and compare fees and rates.

What are the eligibility requirements? These typically include business type, credit score, and revenue requirements.

What are the risks of invoice financing? Risks include potential debt cycles, impacts on customer relationships, and concerns about financial stability.

How can I improve approval chances? Strengthen your business profile, maintain good credit, and provide accurate invoices.

What are common myths about invoice financing? Common myths include misconceptions about costs, accessibility, and assumptions regarding business size.