5 Fast Financing Options for Small Businesses - Make Money Online

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5 Fast Financing Options for Small Businesses

Have your business plans come to a screeching halt for lack of funding? Are you in need of cash to purchase new equipment or increase inventory? Maybe your business is a startup, and you overlooked how much capital was required to get your venture off the ground. Whatever the reason may be, there are many options at your disposal. The key is to research all your options and choose the one that best fits your current situation and long-term business goals. 

Consider the following five solutions that promise fast business funding:

Short-term loans 

Short-term loans are often sought by small business owners that have short-term goals. In most cases, businesses can secure anywhere from $2,500 to $250,000 in a couple of days. These loans are similar to traditional short-term loans: the business receives a set amount after agreeing to pay back over a predetermined amount of time (including fees and interest). One drawback to a short-term loan is the very short repayment period. Your business will be expected to make payments either daily or monthly.

Lines of credit

A short-term line of credit and a traditional line of credit function in a similar way. Both involve being approved for a revolving line of credit, which allows you to draw from those funds whenever you need them. Interest is only paid on the amount withdrawn. The differences between a traditional line and a short-term line of credit are the amounts, rates, repayment periods and wait time for funding. With a short-term line, you can receive your funds in as little as a day or two. However, keep in mind that the maximum amount is $250,000 and typically involves a steep APR.

Equipment financing

Equipment financing differs in that it is an asset-based ­loan. Examples of assets your business owns include: inventory, vehicles, equipment, etc. With an asset-based loan, the lender is relying on the value of the new asset you’re buying – it acts as collateral. (With a traditional debt based loan, lenders are using your borrowing and business history.) The advantage is that you can be approved for financing 100 percent of the cost of the piece of equipment in just a few days.

Invoice factoring

Money being tied up in accounts receivable is a very common problem for small businesses. It creates a serious gap in cash-flow. Invoice factoring allows you to use your outstanding invoices as collateral. Typically, the factoring company will advance up to 85 percent of the total value of your collateral invoices, giving you access to quick cash. Once your customers pays, you’ll receive the remaining 15 percent, minus lender’s fees. Keep in mind you’re only collecting a percentage of your invoices’ value, rather than the full amount charged to the customer.

Merchant cash advance

The merchant cash advance is an increasingly popular financing option, especially for businesses categorized as “high-risk” by traditional lenders. High risk specialists like First American Merchant offer fast business funding to many business types and industries traditional lenders are unwilling to work with. Cash advances are ideal for businesses that fail to qualify for a business loan and need cash quickly. Essentially, the lender purchases your business’ future credit card sales at a discount and quickly advances you the cash you need. That amount is then paid back – at an agreed upon percentage – of your daily credit and debit card sales.
5 Fast Financing Options for Small Businesses 5 Fast Financing Options for Small Businesses Reviewed by Jhon on 2:36 AM Rating: 5