No matter what industry you hail from, your small business will most likely require a little financial help from time to time. Whether you need to pay your employees, buy inventory, or renovate your establishment, many times the liquid cash needed isn’t available.
Luckily, there are alternative loan options available to help you meet the financial demands needed to cover such expenses.
Advantages of Using an Instant Cash Advance
With an instant cash advance, you can apply for – and get approved – for the money you need within 48 hours. Here are 4 distinct benefits to an instant cash advance:
1. They are easy to qualify for
One of the biggest advantages to opting for an instant business cash advance is how easy it is to qualify for one. While big banks place a number of strict lending criteria on borrowers, lenders who offer cash advancements don’t.
Of course, there will be some background checks involved, but these alternative lenders are mainly interested in knowing if you’re capable of paying the loan back. Rather than risk having “rejected” stamped on your application process, you have a much better chance of getting approved for an instant business cash advance compared to a conventional loan at the bank.
2. Cash is funded quickly
Typical business loans can seem to take forever by the time you actually see any money if you’re approved. First of all, the application itself is lengthy and cumbersome. It will then take the bank a long time to review the application before determining whether or not you’re approved. And lastly, it could take weeks before you see a dime after you’ve sent in your application.
On the other hand, a business cash advance is almost instant. You can expect to get your money funded into your account within as little as a couple days – and that includes the application form and approval process. And when you need cash fast, instant is exactly what you need.
3. They are extremely convenient
There’s no need to head into a bank and fill out a form in person when you need a loan. Instead, with a fast business cash advance, you can do everything online from the comfort of your own home. And because remittances are automatically deducted from your account based on a percentage of your revenue, you don’t have to do any heavy forecasting or account monitoring.
Customer service lines at most alternative lender websites are open at much more flexible hours. Whether you choose to call, email or use live chat, getting the help you need with your funding is as convenient as it gets.
4. Cash advances are flexibile
The great thing about fast business cash advances is that they place virtually no restrictions on how you choose to use the money you’re funded with. You can spend the money on any business need as you see fit without having to answer to anyone. Compare this with other types of loans, which usually place restrictions on how you’re allowed to use the money funded.
Typical Challenges Faced By the Average Small Business Owner
Many small business owners will face a number of obstacles when applying for a traditional business loan. For starters, credit scores play a key role in whether or not conventional lenders choose to approve a borrower for a loan. Typically, without a score of at least 680, the chances of getting approved for a loan from a bank are pretty slim.
Another common hurdle that business owners face when trying to get a loan is their lack of collateral. For the most part, conventional lenders choose to offer secured loans, which means a certain amount of collateral is necessary in order for money to be loaned out. Collateral lessens the risk for the lender – if the borrower happens to default on the loan, the lender has some recourse by having the option to seize the collateral in an effort to cover any losses.
Small business owners who have a limited business history may also find it challenging to get approved for a loan from the bank. Traditional lenders want to be able to make sure that borrowers bring in enough money to be able to repay the loan. But with a limited history in business, it’s nearly impossible for these lenders to be sure that revenues will be strong enough to bring in the cash needed to pay back the loan.
Your Alternative Instant Cash Options
Other than a traditional term loan from a bank, you’ve got other options:
Merchant Cash Advance
This type of financing program provides a certain amount of money for the borrower to use how he or she chooses. The lender is then paid back by being permitted to take a certain percentage of daily credit card sales until the entire loan is paid off.
The benefits of a merchant cash advance are that you’re given fast access to cash, the approval process is quick and easy, and there are no restrictions on how you choose to use your money. The downside is that they may come attached with higher interest rates compared to other financing options.
Invoice Financing
Many businesses face the challenge of waiting for suppliers and clients to pay off their invoices. In the meantime, expenses will still have to be paid, whether or not there’s enough cash flow to cover them or not.
With invoice financing, the lender basically buys the invoices and gives the borrower about 85 percent of the loan amount. The rest of the 15 percent is kept in a reserve fund from which the lender takes his or her fees. Once the invoices are paid off, the rest of the 15 percent (minus the fees) are paid to the borrower.
The benefits of invoice financing are that access to cash is quick, bad credit is OK, and invoices serve as collateral so you don’t have to come up with collateral yourself. The disadvantage is that you may be stuck owing more if it takes your customers longer to pay you back.
Business Line of Credit
Having a certain amount of money available at all times can prove to be extremely helpful. When you simply can’t wait to have a loan approved and funded, a line of credit can come in handy. Much like a credit card system, a line of credit offers a set amount of cash that the borrower can access at any time. Any amount can be withdrawn (without going over the limit) and only the amount taken is charged interest.
The benefits of a business line of credit are that you only pay interest on the portion withdrawn, the capital is always available when you need it, and it offers a great way to help build back your credit score. On the downside, you may be charged higher interest rates if you’ve got a poor credit score, and you may require collateral.
Short Term Loan
Like a term loan, a short-term loan offers the borrower a certain amount of money that will then have to be paid back – along with the lender’s interest rate – within a specific amount of time. Unlike a long-term loan, a short-term loan is usually for a smaller amount of money and needs to be paid back no longer than within a few months time. Also, the payments are usually made more frequently – often daily as opposed to monthly.
The advantages of a short-term loan are that you can get quick access to your money with limited paperwork, use the money for any business need, and the debt only stays on your books for a short amount of time. The downside is that it could tie up your credit and hinder you from applying for other types of loans.
Looking For Instant Working Capital Solutions? Credibly Can Help
At Credibly, we know all the ins and outs of small business financing and the hurdles that many small business owners face when applying for conventional loans.
That’s why we’re committed to helping small business owners just like you come up with business funding options for all your needs. To learn more about how Credibly can help you take advantage of an instant business cash advance, contact Credibly today!
If you’re ready to pre-qualify for financing, submit our online request form. It’s free and easy and won’t hurt your credit.