6 Fast Small Business Loans for a Big Fall Season (September 2018)
Many small businesses rely on borrowed capital to fuel growth or fund other initiatives, such as marketing expenses, purchasing inventory, hiring new employees, or just manage cash flow. Sadly, less than 20% of the time, the traditional loan process through a bank works for these businesses. There are 30 million small businesses in the United States and less than 20% will ever be bankable. So, what are all these small business owners to do, when their business needs and answer quickly, to take advantage of an opportunity, to capture additional ROI, or solve an unexpected business emergency? Fortunately, there is a strategic funding source like LVRG which offer fast small business loans with a quick answer (often within a few hours) and can make funds available in a day, rather than 2-6 month application and approval time associated with most traditional small business lending.
When people begin to operate a business, they may not be clear on the major differences between working capital and growth capital. If they don’t begin planning for both types of capital right from the beginning, they may not get what they really need from their business. They also have to be careful that they don’t try to expand too fast, because that can deplete all of their growth capital at once. If it is used up and then more is needed, it can leave a company in a precarious position and stop them from continuing their expansion. If that happens in the middle of growth, it can be highly detrimental and could even spell the end of the business. Most small businesses will need some sort of fast small business loans at one time or another; whether to acquire new equipment, open in a new location, grow their sales force, or to manage cash flow. Fortunately, there are plenty of options out there for the pro-active small business owner. Unfortunately, not all loans are the right fit. Before you apply for your next small business loan, let’s review: 6 Fast Small Business Loans for a Big Fall Season (September 2018):
Cash Flow Loans
Small business cash flow loans are one of the most common loans and can be very beneficial for your business. For this type of business financing, lenders provide you funds and use your future expected cash flow as collateral for the loan. You’re essentially borrowing from cash that you expect to receive in the future by giving the lender the rights to a predetermined amount of these receivables. These are primarily used for working capital or take advantage of short-term ROI opportunities. Your credit scores will be checked, but they play less of a role. As the name indicates, the lender is more concerned with inspecting your cash flow (usually bank statements) to approve your application. Turnaround time is another great feature of a small business cash flow loan, as funding usually takes place in a matter of days. It keeps money flowing freely and evenly.
Working Capital Loans
Working capital loans is a small business funding solution that covers the day to day operations of a business. Many businesses use this type of loan to pay their accounts payable and keep their cash flow running smoothly. Why would a small business choose this type of loan? If you are in a business where the sales are cyclical, such as retail, this type of loan is most beneficial during your dry months where sales are low. At any stage of growth, fast, flexible funding is essential to the continued success of your small business. Working capital loans are typically 3 to 15 month terms and fixed payment options to accommodate your specific needs, so you can focus on what you do best, running and building your business. It keeps your business going until you are back to your money-making norm.
Revenue Based Financing
Revenue based financing can be used for any legitimate business expense, from remodeling or business expansion to buying equipment to launching a new marketing effort. The key here is growth and our business funding options are the perfect solution for business owners looking to take advantage of growth opportunities.Instead of a business being required to pay fixed interest payments like a typical bank loan, a revenue based loan is paid with a percentage of revenues. Small business revenue based financing helps you grow your business and it does not saddle you down with long-term, highly encumbering debt. With a revenue based loan, you will pay it off in roughly 6-12 months, which makes more sense for short-term expenses. Additionally, lenders are usually willing to replenish the loan after roughly 50% is paid down, so you can continue getting more capital along the way. These short-term loans for business are popular across every industry and in every state in the U.S. From manufacturing and transportation companies, craft breweries & salons, to restaurants and retail stores; short-term small business loans are an efficient and cost-effective source of capital, when you need it. Short-term financing can help businesses build or accelerate revenue in ways they couldn't otherwise. And at the same time, working capital solutions offered by LVRG can help business owners negotiate better discounts or terms with vendors and avoid longer-term charges and fees, saving money in the long run.
Bad Credit Business Loan
No one likes to talk about it but it happens, bad credit. When a small business has a bad credit score and history, it can get real tough to obtain loans to keep your business flowing and growing. Fortunately, there are bad credit business loans that will help the owner get the funding they need and improve their credit score so they can opt for better loans with higher lines of credit available. We've found that poor credit history is not a good predictor of future business growth or success. Instead, it’s knowing when to seek business financing and having a plan for how you’ll use the capital to generate more revenue or accelerate it. Short-term business loans and business cash advances more than pay for themselves when you factor in the additional revenue they help generate and business costs they can save.
Business Line Of Credit
It's the nature of business to be cyclical. This means your businesses cash flow will find their own high and low points throughout the seasons, and throughout the years. Will you make it from this ebb to the next flow? Would getting a cash infusion in the form of a business line of credit help you? A small business line of credit allows a business owner to draw against a specified amount of financing on an as-needed basis. The advantage of a business credit line is that you only pay interest on the funds you actually draw, so you’re not stuck paying interest on capital you don’t have an immediate use for. If you’re a business owner taking out a line of credit, you’ll be spending that flexible cash on seasonal business expenses, payroll and other operational costs, insurance against emergencies and for sudden growth opportunities. In other words, as a cushion of cash flow. It’s there for you when you need it most. A business line of credit is similar to a small business loan but functions like a credit card. You apply for a line of credit, much like you would a business loan. While the small business loan gives you a lump sum of money to use upfront, a line of credit is money available for you to use at your discretion. Just like a credit card, you pay it off each month to avoid interest and have this line of credit available even after you pay off your balance. Certain businesses, such as retail establishments, benefit more from lines of credit because of the predictable variations in cash flow. Seasonal changes in sales mean earnings fluctuate on a set schedule, and extra money is often needed to continue operations during slow times. When you’re able to anticipate these financial needs, you can rely on a line of credit to provide security.
Merchant Cash Advance
A Merchant Cash Advance (MCA) can provide business borrowers with an upfront fixed amount of cash in as little as 24 hours. The funding amount is based upon a percentage of the businesses credit card receivables or daily cash balances using historical credit card receipts and bank statements to determine the initial advance. The business pays back the advance, plus a percentage, often referred to as a discount factor, from a portion of their credit card receivables or cash available plus a percentage which is often referred to as a discount factor. The remittances are drawn from the business customer on a daily, or weekly basis until the obligation has been met. MCA's are good options for small business owners who may not have strong credit but have lots of credit card activity and need financing quickly.
Not all businesses or surprises are the same, but here are some pretty common business expenses that are sometimes difficult to anticipate:
Equipment failure: If your business relies on specialized equipment to do business, regardless of whether it’s a pizza oven critical to your restaurant or a large mash tun that plays an integral role within your craft brewing process, every hour that equipment is down is costing your business money. Acting fast to get up and running again is a part of staying viable.
Building maintenance problems: If you do business out of an older building, it’s not uncommon to occasionally face plumbing, electrical, or other building maintenance problems. The costs of digging up a sewer line to the street or putting a new roof on your building can easily add up beyond what might be available in your cash flow—particularly if the expenses are unexpected and need to be responded to quickly.
Growing pains: Most business owners welcome the opportunity to grow, but sometimes growth comes with unexpected expenses. There are sometimes overlooked expenses to hiring new employees like additional supplies, training, or maybe the need to purchase a new desk and office equipment. Depending upon your business, ramping up a new employee can become expensive. While most business owners want to see their businesses grow, it’s difficult to anticipate every expense associated with growth.
Unexpected opportunities to increase profits: Not all surprises are bad news. For example, suppliers sometimes offer unexpected discounts to their customers who can act quickly to take advantage of a special offer. It might be an opportunity to purchase quick-turnaround inventory at a steep discount or maybe a special offer on a new piece of timesaving equipment that will make serving your customers more efficient. To take advantage of opportunities like these, you’ll need to act fast and won’t be able to wait for several weeks to get an answer from the local bank.
An opportunity to expand: Maybe that extra space next door has become available or the bigger storefront down the street has gone up for sale. The opportunity to expand might make it possible to secure more customers and generate more income, but the added expense might be something you hadn’t anticipated. Quick access to capital might be required to pull it all together.
In a survey conducted in the spring of 2016 by the Electronic Transaction Association (ETA), 63% of the small businesses surveyed identified speed to funding as the reason they chose an online business loan. 57% cited the easy application process and 51% the affordable total loan cost. Needless to say, a quick answer and quick access to funds is an important consideration to many small business owners. 96% of those surveyed said the reason they were borrowing was to secure capital to enable or drive business growth. Additionally, these small businesses generally anticipate a 5x return for every dollar they borrow. In other words, they expect to earn $5 for every $1 they finance to purchase things like inventory (51%) or equipment (54%).
In some cases, access to capital is a great way to take advantage of new opportunities. In others, however, it can be a good way to pull a struggling company out of a pit of poor circumstances. Despite the potential for risk, capital can be the saving grace when trouble comes to call, providing the means to bridge the gap between failure and success. A few extra dollars today may mean an empire tomorrow, and can be the necessary protection against closing up for good.
Any of the fast small business funding options mentioned above, whether for a few thousand dollars or a few million, can make previously unavailable opportunities obtainable, providing a customized solution in a time of need and keeping the lights on even when the going gets rough. With ready access to business capital, the possibilities are literally limitless, offering the assets you need to promote a positive trajectory and inspire healthy growth. Getting into a cash-poor position should always be avoided, because it’s difficult to recover from. It makes sense that companies want to grow as fast as possible, but those companies must be very careful that they avoid the pitfalls of burning up their entire growth capital fund. Instead, it is better to focus on slower growth, so the fund stays strong and the company builds strength at a more sustainable rate.
So, why LVRG? We combine data-crunching software with a human touch to come up with affordable funding solutions that best fit your needs. LVRG is a team of the right people, working with the right data, getting you the right-size funding for your business. At LVRG, we believe we are different from other lending firms. We never set out to be the biggest, but we constantly strive to be the best. Our deep sense of integrity, professionalism, and commitment to the spirit of entrepreneurialism, propel our determination to provide assistance to small business owners in a challenging economic climate. LVRG Funding is the smart choice for fast, reliable, small business financing. Call (855) 998-LVRG or click the button below to apply now.