Are you a business owner hoping to see the business you’ve started out of your home or garage take off and generate the kind of revenue you want? You’ve probably already discovered the going can be tough, and many small business owners find it to be hard to last more than five years. There are many reasons for that, but one of the second most common reasons for it is lack of access to financing or capital. A reason for this is because the main source of business financing through bank loans is very hard to qualify for. Banks are subject to high regulation and are picky about who they loan to, and new business owners often simply don’t have much time to get all the loan paperwork done. The great news is there are so many other loans or financing options out there that don’t require things like high credit scores or a long business history. You may consider looking completely outside the bank if these options work for you.
Asset-based Loans From Marketplace Lenders
Whether you have a substantial amount of business assets either in the form of accounts receivable receipts, inventory, equipment or real estate, an asset-based loan may be able to help you. Many alternative lenders offer these based on the overall value of the collateral you offer, or even if you don’t have the collateral yet but will be purchasing it with the proceeds from the loan, you may qualify for it. There can still be a waiting time to qualify for an asset-based loan since your assets will have to be appraised. But if you go outside the banks you may have a shorter wait time.
Quick Cash Loans For Business Purchases
If you’re looking for loans that can get you a decent amount of cash but without any major wait times, then loans like an auto title loan or alternative installment loans might be an option. Title loans and installment loans are much more preferable to payday loans because you can usually borrow more funds and have more time to pay them back. But be aware not all states allow these kinds of loans, and some can come with very high interest rates which may not make them worth using. But you can usually use the proceeds for any business purchase you want.
Accounts Receivable Invoice Factoring And Merchant Capital Advances
There’s two other forms of financing that really aren’t even loans at all. The first is invoice factoring where if you have outstanding payments that your customers owe to your accounts receivable, a company can buy them from you and collect the payments themselves. Usually there is a commission fee they’ll deduct from what your total accounts receivable are worth, but if you want your money right away and have plenty of unpaid invoices, this might be the way to go. A merchant capital advance is a little similar to invoice factoring, but instead of buying existing invoices, the provider is buying future credit card sales. They offer a lump sum of cash that will be repaid each time you make a credit card sale and has no minimum monthly installment you have to pay unlike a loan. But sometimes the factor rate and deduction amounts can be high which could put your business in a cash flow shortage.