Your business needs to hire a few more employees and purchase new equipment, but you have run into an obstacle. You need to boost your cash-flow to do so, but do not have the credit score you need to qualify for a small business loan. If you have found yourself in this situation, you are not alone.
Many small business owners that have less than stellar credit struggle to find a lender willing to work with them. This can make day-to-day tasks incredibly difficult to fund, not to mention lack of capital can push your business into a dangerous cash-flow situation. Thanks to the growing online lending industry, there are many viable options out there that do not require a perfect credit score.
Online Lenders
If your credit score is below 700, securing a small business loan from a bank will simply not be an option for you. Many alternative lenders, on the other hand, specialize in working with businesses considered “high risk” – this includes bad credit. Besides securing much needed funds, there are many additional benefits to working with an online lender:
- Online lenders work much faster than banks do.
- Online lenders offer a straightforward application process that is easy to apply for.
- Online lenders might be more expensive than a bank, but their programs are more flexible.
- Online lenders offer more types of business financing options than the bank.
What are My Options?
While online lenders offer many types of business funding, you will have to decide which one works best for your business’ needs and situation. Consider the following popular alternative financing options:
- Invoice factoring – If you invoice your customers for your products or services and those customers are other businesses, you can qualify for this financing option. With invoice factoring, you sell your accounts receivable (invoices) to the factoring company at a discount. The factoring company then offers you a cash advance.
- Short-term loans – A short-term loan is usually 3 – 18 months in length, and the repayment process involves daily ACH payments. The short applications and fast funding time make this option attractive to many business owners.
- Merchant cash advance – One of the most popular online lending options, a merchant cash advance is a lump sum of capital you repay using a portion of your daily credit card transactions. This cash solution is known for its fast funding times – in as little as 24 hours – and a hassle-free application process.
If you would like to learn more about a business cash advance bad credit, contact the team of experts at First American Merchant.