As a small business owner, you know that sometimes you need cash quickly. Standard term loans don’t always provide the timeline or terms that align with your needs and you need to look to alternative options to make sure you can stay on top of your responsibilities.
Here are 3 options for attaining cash quickly that don’t follow the standard term loan process.
- Asset Based Loan
Every business has assets. That might be property, equipment, or inventory. It could also be your outstanding invoices. Any of these assets can be used as collateral to secure an asset based loan. Depending on the size of the loan, type of collateral, and your business credit and earnings history, the size of these loans can vary.
- Merchant Cash Advance
If you collect credit card payments from your customers, you’re likely qualified for merchant cash advance loans. These are generally smaller loans given by merchants or credit card processing companies. You will pay back this loan by giving a small percentage of your credit card sales back to the lender until the loan is paid off.
The benefit of this type of loan is that it can be very quick. In many cases, you can get funding in a day or two. You can also avoid the hassle of managing a payback schedule as it is done for you automatically.
- Peer-to-Peer Lending
There are many websites devoted to allowing business owners to pool resources to “crowdfund” loans to other business people. These sites can vary in their offerings but can be a good option if you don’t have great credit, or enough assets to back a loan. You’ll have to sell your business as a good investment to the individual lenders, though.
There are options available. As a good business owner, you should stay on top of the offerings, big and small, so that when cash flow problems rear their ugly head, you’ll be ready.