5 Emergency Finance Options For Your Small Business
Running a business can be challenging – you need to know how to make a profit during difficult economic times and manage your finances in a way that helps your company to thrive. If you are struggling to make ends meet, to stretch your income to cover the necessities, and you’re faced with an emergency expense, you may not know where to turn. Thankfully, there is a range of options you can use to give your business a boost when you need it most, like a merchant advance, same-day loans and invoice financing. Read on to find out more!
- Merchant cash advances
This type of financing could be a perfect option for your business if you find yourself strapped for cash in an emergency. It is an alternative to a fixed loan that a business would have to pay back. With a merchant cash advance, you agree on an amount with your chosen lender that you will then pay back to them with a percentage of your future sales, so if you take both credit and debit card transactions, a merchant cash advance could be the best option for your business. There is no interest that comes with a cash advance, and you won’t end up in debt because of it. Another advantage that comes with this type of financing is that you can have access to funds in a hurry – the same day in most cases!
- Short-term business loans
Different to a merchant cash advance, a short-term business loan gives businesses a chance to access finances when they need them most. These terms are generally paid back in a year or two and are usually for fewer amounts of money than you’d find with an average business loan. There are a few factors that will play a part in whether you meet the criteria for a short-term business loan, like your credit score depending on the lender you choose. You should also consider the interest that you will have to pay, as well as the period of repayment – as short-term loans tend to be paid back over a few months. If you need a lump sum of cash quickly to use for an emergency expense, applying for a short-term business loan could be a great option, you’ll just have to be sure that you can afford it first.
- Invoice financing
This type of financing allows a business to use their invoices as collateral so that a lender can give them an advance on the funds they are waiting on from clients and customers. If you need to pay for an emergency expense, this could be one of the best ways to do it. Invoice discounting is one of the easiest methods to get to grips with – you can choose when to discount your invoices, and you are in control, which means you can have an immediate cash advance when you need it most. Your lender will pay 70-95% of the invoice value, to help you reach your goals. This type of financing is helpful, however, it is also one of the most expensive, so think about all of your options before you decide.
- Bad credit business loans
So, you have bad credit, but you need a boost to help you to get where you need to be, for growth, or to pay for an unexpected expense – there are loans for this too! If bad credit is worrying you, and you don’t have time to fix it before you apply for a loan, bad credit business loans could be the best option. Your lender will need a few key pieces of information before they can decide whether you can be approved for your loan – this includes your personal credit score, your time in business and your yearly revenue. All you have to do is apply, and you’ll know whether you’ve been approved within 48 hours. If you are unsuccessful, you can try applying for no-credit-check finance, like a merchant cash advance.
- Same day business loans
Perfect if you need funds quickly, same-day business loans can help you get approved for a lump sum of cash in as little as 24 hours. Although these loans do come with high-interest rates, they can be a huge help if you are faced with an expense. There are a few types of same-day business loans available such as applying for a business credit card, a merchant cash advance, or a line of credit. Before choosing a same-day business loan you will have to do a bit of research to ensure that you can afford the repayments. Due to the fact you will have access to funds quickly, other fees may also make them an expensive choice, like high-interest rates. Choose an option that is beneficial to your circumstances so that you don’t end up in further financial difficulty.
*This is a collaborative post.
