Financing Options For Your Small Business

by | Jul 21, 2015 | Financial Services, Loans

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Businesses are always in the need of capital in order to conduct daily operations, meet financial obligations, and stimulate future growth and expansion. Financing options, such as small business loans and merchant cash advance can provide the capital needed to ensure you meet your business goals and sustain stability within your business. However, it is key to evaluate these options to better understand which option is the most beneficial to you. Knowing how quickly you need access to capital and whether you need financing for long term are the important traits in understanding which option is for you.

What Small Business Loans Can Offer Your Business

Establishing a sustainable business can provide security in overcoming economic downturns and new market trends in the long run. Small business loans can help provide this by capitalizing your business for future growth. These loans will provide your company the means to invest in assets, such as real estate, new equipment, and other existing businesses. Requirements to obtain such a loan include supplying your lender with your business plan, credit history, financial statements, and collateral.

Many small business loans you may be interested in are backed by the SBA. This means that your lender would earn a portion of the loan from the SBA in case of a default on payments. Due to the risks often placed with these loans, collateral will often be required and interest rates will be higher. Depending on your goals, a small business loan may be productive in helping your business grow and expand.

How Merchant Cash Advance Can Help Your Business

Businesses are in often need of quick access of cash to meet payroll obligations, supply working capital, or for inventory. Benefits of merchant cash advance are that lenders supply business owners with a lump sum payment to fulfill these needs. There are no fixed payments scheduled, there is flexibility in repaying the sum, and the capital needed can be acquired very quickly. Merchant cash advance can be thought of as an exchange of payment, for a sale of a company’s future revenue in credit or debit sales.

This option is most productive for businesses that don’t require long term financing. Other advantages of this option are that there are no pre-payment penalties or collateral required. In addition, payment is flexible since there are daily, weekly, and monthly terms. However, the disadvantage is that rates will be higher, since merchant cash advance are short term loans.

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