There comes a time in every business owner’s life when they will have to borrow money. Today there are so many loan options, that owners can get overwhelmed with all the possibilities. In an emergency cash situation, it is easy to pull the trigger on the first easy small loan that comes your way. But hasty loan decision making can be extremely hazardous, and have harsh long term or short term consequences. Here are a few things to consider before applying for a small business loan.
Analyze the urgency of your particular situation. Do you need the money right away, or can you wait and opt for a loan solution that may take a little more time to come through? What is the tradeoff of fast cash, and what does that mean for your business? Generally speaking, fast money means you’ll pay for higher fees and interest rates for speedy service. Here are some types of loans that can be processed quickly.
- SHORT-TERM LOANS
Short-term loans can help businesses address situations that demand fast funding like, pressing cash flow shortages, unexpected repairs and emergency personnel. Short-term loans are structured like conventional loans, except borrowers have to repay loans at a faster rate.
- LONG-TERM LOANS
This is the most popular type of loan. Lenders give a certain amount of money under a fixed or variable interest rate, and the borrower pays back the loan over a specified time frame. These types of loans are predictable and on time payments can improve your credit. Many long term loans take a longer time to process, weeks or even months. Some long-term loans can be sped along, but it’ll cost you. Consider if the short processing time fee is worth the loan.
- INVOICE FINANCING
Invoice financing gives you capital upfront for your pending invoices, so you don’t have to wait for your customers to pay outstanding invoices. This creates a more consistent cash flow, which stabilizes your business. Processing time is much shorter for invoice financing loans, and can help raise funds faster. However, this can be a pricey option because lenders get a piece of every invoice sent to your company in exchange for service.
First American Merchant offers a variety of customer financing options that can be customized to fit your business’ needs. Our offers are simple, flexible loan programs that are fair and competitively priced, that will get you cash within 72 hours. Renew your faith in alternative lending with our low hassle, consumer friendly lending options.