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Quick Financing Options for Small Business Owners

You encounter the real money challenges of running a business when you’re short of finances and in a tight situation that threatens to halt operations on your premises.

Business financing is your safety during such times, and the quicker it comes, the faster you can fix the situation before it escalates into tragedy.

So what are some of the fastest ways to get commercial funding to survive unexpected business expenses like equipment breakdowns, a pandemic, cash flow problems, or funding sudden growth opportunities?

  • Invoice Financing

Invoice financing is acquiring finances in exchange for your pending invoices.

A business can finance all or a portion of its invoices. In exchange, lenders give up to 80% to 95% of the invoice amount, reserving the rest as collateral. As soon as the client pays off the pending invoice, the borrower owner will get the remaining portion minus agreed-upon transaction charges.

This product gives you access to immediate funding instead of waiting 60 to 90 days to receive the payments from an invoice.

A business can use this funding to cater to operational expenses, buy inventory, and do more. 

  • Equipment Financing

This product is meant to help businesses buy equipment. It allows you to purchase or lease essential workplace equipment.

Many lenders will willingly give one because they consider the purchased item as collateral for the loan, thus a low risk of defaulting.

Paying back the entire amount gives you full ownership of the equipment. Defaulting may lead to the seizure of the equipment. 

  • Business Lines of Credit

If you’re after flexible funding, then a credit line is the way to go. Stats show almost 40 percent of 2019 loan requests sought for business credit lines.

With commercial lines of credit, lenders set a credit cap that you can access as you wish (up to the set limit). Borrowers must repay the withdrawn amount with interest. And for the cherry on top, these funds can be used for any business-related expenses.

  • Merchant Cash Advance (MCA)

An MCA or merchant cash advance is more of an advance lump sum than a loan, which you can take against your upcoming card sales.

The lender gives a lump sum of money upfront, and the borrower pays back in the form of a pre-discussed percentage for each card payment until they clear the advance..

An MCA is a swift and hassle-free way to get cash, however, you should also know it can be an expensive financial solution.

Also, they charge a factor rate Instead of an interest rate. And while it’s one of the simplest ways to get a loan, MCAs can be expensive with factor rates of 20 to 40 percent.

Closing Up

Quick financing can breathe life into your struggling business and help it survive to thrive another day. Still, companies must remember that loan products are not created equal. Be sure to double-check contract terms with your lender before committing to a loan.