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Positive cash flow is crucial for any business. But while every entrepreneur hopes that lean periods only happen occasionally, maintaining cash flow can be a daily struggle for small business owners. Even with the best planning, they’d often need an infusion of money to keep their businesses operating or growing.
There are several ways to raise funds for a business. But some business financial needs can be urgent where you’d need immediate cash. Read on to find how you can get quick funding for your small business.
Business Payday Loans
A business payday loan is a short-term loan that you can access if your business needs immediate financing. You’ll have to repay the amount you borrow in a lump sum along with interest. Depending on the lender, the repayment period for a payday loan is usually within two to four weeks of the loan.
So, if you’re planning to apply for a payday loan for your business, make sure that you have a detailed business plan so you can pay it back on time. Some providers of payday loans typically have physical stores with on-site credit applications and approval. But other payday loan services are accessible through online lenders.
The good thing about online payday loans is that they are easier to access. You can get approval within an hour or two and have the fund deposited in your account within days, if not the same day.
Equipment Financing
If your business has a specific need to purchase equipment or machine outright, getting equipment financing is likely the most suitable option for you. But unlike other forms of loans, this type of financing is asset-based. It means that the lender looks at the value of the equipment you’re buying, which also serves as collateral if you default on the loan.
So, regardless of your business credit history, you can get approved for equipment financing. The application and approval process can take as little as two days, and you can even acquire funding at 100% cost of the equipment.
Business Line of Credit
A business line of credit is another way to fund your business as quickly as within a single day. Just like credit cards, it’s a revolving loan that allows you to draw cash from your credit limit whenever you need it.
What’s good about a business line of credit is that you’ll only pay interest on the amount you use. You can also borrow again, provided that you repay everything in full or you don’t exceed the preset borrowing limit, typically ranging from around $1,000 to $250,000.
Invoice Financing
Slow-paying customers can disrupt your business cash flow. However, if you have unpaid invoices, you can use invoice financing to support your cash flow for the time being. So, instead of waiting for your customers to pay their balances in full, you can sell your account receivables to invoice financing companies.
Most of them will pay you 85% upfront of the total value of your invoices. Then, once your customers pay, you’ll get the remaining 15% back, minus the lenders’ fees. It can be an excellent option, especially if you have orders coming in and you don’t have the cash to fill those orders.
Peer-To-Peer Loans
Peer-to-peer loans are another viable option for your business. But rather than using a bank or lending institution, you’re going to work with potential investors that are willing to invest in a new or growing business. All the transactions for peer-to-peer lending are done through a specialized online platform.
The said platform handles the application process. If you’re approved, you’ll receive the available options from the investors based on your credit rating and the corresponding interest rates. Note that you’ll make a single payment through the same platform instead of the monthly payments.
Essential Points to Remember
Every business would need a fast cash loan at some point. But before you take on debt from quick funding, there are some essential points that you have to remember. First, most fast business loans have a short repayment term, meaning you have to pay back the loan within a limited period. That’s why they are most suitable for small financing needs.
When you apply for quick funding, ensure that you can pay back the loan on time. Else, you could put your business in a worse financial situation. Taking out any loan should help your business grow and not the other way around.
Make The Best Choice For Your Business
With all the online options, funding your business today can be much more accessible and convenient. But at the same time, it can be challenging to choose what’s right for your business. So before you make any decision, make sure to do your research and consider every possible factor that may affect your business in any way.
