Many businesses have been hit hard by disasters. The latest one is the COVID-19 pandemic, but many different emergencies can disrupt your business flow, from tornadoes to illness. If you find yourself needing immediate business financing, here are some suggestions.
Merchant Cash Advance
A merchant cash advance (MCA) is an advance on future credit card sales. The lender gives you a lump sum and then takes out a portion of your daily receipts until the advance and fees are paid off. This type of funding doesn’t go on your credit report. You pay off the loan based on sales instead of a monthly payment.
Accounts Receivable Financing
Also known as factoring, this type of business financing depends on your invoices rather than your credit score. The lender gives you an advance from your unpaid invoices. When the customer pays the invoice, the lender takes out its portion and fees. You can often get financing very quickly, in about a week. Your credit score isn’t checked. It’s based on your customer.
Business Credit Card
Although you do want to avoid taking out a cash advance with a business credit card, you can pay for supplies and other expenses. You’ll have more time to pay off the balance, but be aware that fees and interest can quickly add up. However, a credit card can be a good thing to have in your pocket for emergencies.
Instead of a long, drawn out process to get a traditional loan that may take 15 years or more to pay off, consider a short-term loan that lasts a year or less. The application is quick and easy. You can often get business financing in under a week. You’ll have to go through an alternative lender, but if it helps you through a slump, it might be worth it.
Call financial specialists with Ambition Funding Solutions for business financing options.