It never really seems to be a question of if your business could use extra funds; it’s usually more about how it could benefit from extra funds, when your business needs it the most and where you can get it. There are many different ways to externally fund your business, but not all of them will suit your specific needs and situation.

Consider the two ways you can externally fund your business: debt and equity. If you choose to use debt, you will retain ownership of your company with an obligation to repay the investor. If you choose equity, you don’t have an obligation to repay the investor, but you sacrifice some control over your business. Debt financing options include: small business lenders, SBA loans, banks, etc. Equity options include: bootstrapping, self-funding, friends and family, crowdfunding, angel investors, etc.

What to Look For

So how do you know which option is right for you? The option you choose will greatly depend on your business type and industry. Banks and traditional lenders shy away from businesses they deem “too risky”. Thus, shutting the door to that option. Working with a bank will also be unlikely if you have bad credit, insufficient business history, bankruptcy or tax liens.

The amount of funding you need and how quickly will also play a big part in your decision. Traditional options require significant financial information and extensive documentation. You could wait weeks or even months to hear back, only to be told you’ve been declined. Other options (e.g. borrowing from friends and family) may provide you with fast cash, but not as much as you need to be successful.

Business Cash Advance

The obstacles business owners face in securing small business financing have led many an entrepreneur to alternative lenders like First American Merchant. Increasingly one of the most popular business funding options is the business cash advance. A cash advance provides your business with a lump sum in exchange for a daily share of your business’ credit card sales. (A cash advance is not a loan; it is simply a sale). The amount, along with the agreed upon fee, is then paid back as a percentage of the business’ daily sales.

With FAM, your business can secure the funds it needs in as little as 24 hours. You also benefit from having a team of experts with years of experience in high-risk business funding. Startups, businesses considered to be “high risk” and those struggling with bad credit or bankruptcy – even merchants on the TMF list – can all take advantage of this business funding option. The online application requires minimal documentation and can be completed in a matter of minutes.

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