One of the biggest challenges that come with owning a business is finding consistent funding that will allow you to run your business in a way that will draw in more customers. While conventional loans are often the first option that business owners turn to, there are several alternatives that you should be aware of before you decide which funding choice is right for you.
Invoice Financing or Short Term Loans
You can use alternative or short-term lenders to get this type of funding. This type of business financing options will also allow you to go through the application process online. If your credit history isn’t great or you don’t have much borrowing history, a short term loan or invoice financing could work well for you. However, these loans tend to have a higher interest rate than conventional banks. Cash flow loans are often unsecured smaller loan amounts for up to $50,000. The funds are available in about two business days, and you repay the loan weekly or daily. The repayment period can last anywhere from a couple of weeks to two years. Since you can apply for the loan online, you won’t have to worry about all of the back and forth that comes with traditional applications. You can also apply for loans that will access your business data online so that you can find funding that is specifically tailored to your company needs.
Term Loans
This method of business financing option will last from 2 to 5 years, and you can get up to $500,000 in most cases. According to your loan agreement, you’ll need to pay on the loan each month. The interest rates are lower for secured loans and they are relatively easy to apply for. The funds will often be available in 1 or 2 weeks.
Overdraft Protection
This is a popular business financing option and it allows you as the business owner to have access to funds that are greater than what is in your business’ bank account. If you’re looking to remodel your business or expand your company, this is probably not the best option. Most of the time, financial institutions won’t offer more than $5,000 for business purposes. You can utilize the overdraft option if you need temporary cash, or a small amount of money to purchase supplies for your company.
Business Credit Cards
Credit cards are a suitable business financing option if you need money quickly. However, if you’re getting a loan from a credit card, the process can be expensive because the interest rate is high. You can get a fixed amount that is based on your credit limit and history. Your outstanding debts will also be considered during the approval process. Once you get your business card, you’ll be able to take advantage of special rates that help you organize your financing needs. There are also a number of rewards that are offered as a result of having a business credit card.
Merchant Cash Advance
If none of these options work for you, it may be best to consider a merchant cash advance. This type of funding is great if you want a loan that doesn’t require a high credit score. The repayment process is based on your credit card sales percentage, and you can get approved in just a few hours. After reviewing your company’s budget, contact a merchant cash advance company that is best for your business.