Most small businesses will try to apply for a small business loan at some point. But if you have a high risk business, chances are you will be rejected for a loan by traditional lenders. Luckily there are more alternative sources for high risk merchants to turn to. If you are tired of being rejected by banks, take a look at these other funding solutions.
Small Business Association Loan (SBA) Programs. There has been a steady increase in the number of SBA loans available to small businesses. SBA loans guarantee that a percentage of the loan will be repaid to lenders, no matter the actions of the borrower. This makes it simpler for banks to give money to high risk merchants.
Credit Unions. Credit unions are not-for-profit organizations that provide credit and financial services. They also offer lower loan rates than most traditional lenders. Most offer flexible payment options for borrowers, and don’t penalize business owners for repaying loans too soon.
Business Line of Credit. A business line of credit, like a credit card, is approved in advance and ready when you need it. There is no fixed payment requirement, meaning companies can get away with only paying the minimum every month.
Merchant Cash Advances
Merchant cash advances are not small business loans. With advances, lenders give merchants an advance against future credit card sales. This means lenders will receive funds from the merchant’s future credit card transactions (the holdback) for a specified time period. Merchants will make payments on a daily or weekly schedule. There are more advantages to acquiring a merchant cash advance like: (1) no fixed monthly payment (2) dynamic cash flow system that lets merchants to pay less when business is slow (3) no checks required (4) advances can be used for any business expense.
If you are starting a new business and are tired of bank restrictions, consider talking to a lender that understands the high risk industry and is ready to offer quick cash with few requirements. Contact First American Merchant for a small business cash advance to get working capital and alternative business financing. Why wait? Start your application today.