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5 Truths about Working Capital and Small Businesses You Need to Know

Working capital is the lifeblood of every business, big or small. However, it isn’t always easy to know where to find it – or is it? Consider the following five truths about working capital. You might be pleasantly surprised to discover how simple it can be to find and secure working capital for your small business.

  1. Banks are not your only – or even best – solution

Banks are rarely an effective solution for small businesses in need of financing. In reality, banks are routinely reducing the lines of credit they are willing to extend to small businesses. Even if you can secure working capital from a bank, the money may come all too late. Banks are known for their long wait times for funding. After filling out extensive documentation and providing significant financial information, you can wait weeks (or even months) just to find out you’ve been denied. Their credit requirements are also incredibly strict.

  1. It is possible to avoid long wait times for funding

Many entrepreneurs turn to alternative business financing solutions from a provider like First American Merchant. Their working capital funding options are easy to apply for. Credit scores below 500 are approved, and no tax returns or financials are required. Rather than waiting weeks or months to receive much need capital, small business can secure the cash they need in as little as 72 hours – if not sooner.

  1. Speaking with a working capital expert is a good idea

There are many working capital funding options available, but not all of them will be a good fit for your business’ situation. How much funding is available with the solution you are considering? Are the rates too high, and the approval rate too low? What does the collections process involve? The advantage of working with a lender like First American Merchant is the team of high risk specialists who are ready to help you. Their team of experts can ensure that the business funding option you choose is tailored to your business’ specific needs.

  1. Working capital funding programs can be flexible

Believe it or not, working capital funding can be flexible. Unlike a traditional lender, alternative providers can offer an easy collection process. A merchant cash advance, for example, involves the lender purchasing your business’ future credit card sales at a discount in exchange for a cash advance. The amount, along with the agreed upon fee, is then paid back as a percentage of the business’ daily sales. All in all, offering a flexible, hassle-free collections process.

  1. High-risk businesses and industry can secure working capital

Despite what you’ve been told, high-risk business types and industries can secure working capital. With a high-risk specialist, even businesses on the TMF “black” list, those with past bankruptcies and tax liens, those with bad credit and business startups can secure the capital they need to grow, expand and seize opportunities. Just another advantage of not restricting your working capital options to traditional lenders.