As the economic condition is changing, it is becoming more and more difficult for the small companies to obtain Cash advance now for their business. As we all know banks and financial institutions take a very long time in sanctioning loans to the small firms.
Moreover, a lot of documents are required to be submitted by the small business owner to the banker to get financial assistance. Even after that, there is no guarantee that the loan will get approved. Here are some of the cash alternatives that a small business owner can approach to fund his or her business.
1) Acquire cash advance from your credit card
If you need some monetary assistance, then you can go to credit card provider. But one thing you need to keep in mind is that you will have to pay off a massive interest amount later. At least you can rest assured of the fact that you are not approaching any third party to get Cash advance now as the money, you have borrowed against your credit limit. If this option of obtaining cash advance is not surmountable to you, then you can use it once and then avoid using it later.
2) Use emergency fund
If you cannot afford to pay high-interest amounts, then you can try out obtaining Cash advance now from the emergency fund for covering the day to day expenses of the small business. As this is your own money, there is no burden of repayment.
3) Online Lenders
Certain online lenders are ready to provide you Cash advance now that is quick and easy. The lending procedure under this type of funding gets completed on the internet. Online lenders give you an option to complete your application online within a few minutes. You will be required to submit the documents related to your business, and then you will get the monetary assistance from the online lenders within 24 hours.
This type of funding takes place within a few days from the date of approval. On the other hand, some providers transfer the loan amount to the account of the business merchant on the very day when it gets approved. However, there are specific borrowing requirements that you will be required to follow. There is a high cost of borrowing in case of online lending.
4) Invoice factoring
Generally, it takes you around 60, 45 or 30 days in collecting the invoice from the consumers but if you want Cash advance now for your small business, then these invoices can also be factored. When a business owner factors the invoices, he or she receives a discount amount, and the amount that you receive is called the factor fee, which is not more than 2% based on the type of industry your business is a part of. It takes around a week or so for setting up a factoring account. As soon as the account gets created, all you have to do is to submit the invoices and get cash advance within a day.
5) Merchant Cash Advance
An MCA or merchant cash advance is another source of Cash advance now. You can also make use of the cash advance amount of your business credit card if your small business is in the urgent need of money. This one is considered the best option for acquiring quick financial aid. Moreover, the borrower enjoys a lot of flexibility in repayment. Another great thing about taking an MCA from the MCA providers is that you will not have to pay any interest.
6) Business line of credit
You can get as much Cash advance now as you want from the business line of credit although the amount of cash withdrawn is limited to the size of your credit line. According to this source of financing, you are only required to pay interest on the money that you use.
The credit line of this type of funding is dependent on the basic loan standards. This includes the amount of collateral security which will be sold off in case you commit a default in the repayment of the loan amount, ability to hold the debt, actual worth of the business or capital, records, the tenure of the business, and character.
7) Business funding 401(k)
If a small business owner has taken a plan of 401(K) and such a plan enables its members to take a loan, then this is one of the best sources of obtaining Cash advance now. The amount that you can borrow cannot exceed 50 percent of the total balance in your vested account. This type of funding is done very quickly as the only administrator takes time in processing it.
However, the rate of interest to be paid under this loan scheme is very less and the period for paying back the loan is five years. Plus, there is no penalty imposed on the prepayment of this loan in case the borrower wants to repay it earlier. Nevertheless, there is one downside of this source of funding, and that is your retirement savings will get reduced.
Out of all the sources mentioned above of obtaining Cash advance now the best one is MCA or merchant cash advance. Every other source of finance whether it be invoice factoring, the business line of credit or taking an emergency fund. Each one of them either demands a high rate of interest or there is rigidity in repayment of loans.
None of these sources allow you to use your money flexibly, but merchant cash advance is different. MCA providers will enable a business merchant to use the cash advance borrowed flexibly. It can be used for meeting the working capital requirement, for daily needs, or for expanding the business. Plus, MCA providers don’t disqualify a proprietor from obtaining a loan if they do not have creditworthiness.