Considering the tough economy, most business owners struggle to make a decision whether they should take a business capital loan to grow and expand their business or not. It goes without saying that the long-term recession paired with economic uncertainty has clearly frightened people who are running businesses. If we compare today to the global recession back in 2008, the unemployment rate has not improved. This is why people prefer cost cutting in the form of axing people who are additional resources by classifying them as ‘non-essential.’
It does not mean that companies do not have a sound business reason to cut instead of growing and moving forward. Cutting back sounds okay in case of small and medium-sized businesses, as they do not have sufficient funds on hand to meet financial needs. Cost cutting does not necessarily mean that you are solving a problem – it is a sign of compounding the problem.
As a business owner, it is essential to understand that if you do not have enough cash on hand to invest in your business, you will continue to stagnate. Therefore, it is recommended to not consider cutting back as your solution. Instead, opt for a business capital loan that will help you grow your business. In today’s time, the economy has stabilized to a great extent. Thus, business owners can take risks that will drive them forward instead of stalling.
Grow and Create More Employment Opportunities
As discussed earlier, people usually associate cost cutting with letting employees go to free up finances. Different types of business capital loan that are available in the market are designed to serve only one purpose i.e. to ensure the growth of your company. With such options available at your disposal, focus on growing your company and adding jobs rather than cutting back and eliminating such opportunities. This way, you will contribute to the solution. If you have a solid business plan for which you require funding, there are numerous business capital loan
companies available to provide you with the desired funding. It is essential to know why you need access to funding and how you are going to use them. In case you are not sure, there is no point thinking about it in the first place. However, make sure that you do not miss the opportunity to grow and expand when the timing is right. Therefore, what you can do is arrange a meeting and discuss with professional financial advisors for assistance before proceeding. As a business owner, you should be willing to take risks wherever necessary to stay ahead of the curve at all times.
Approach a Merchant Cash Advance Lender First If You are Looking for A Business Capital Loan
Merchant cash advance, or MCA, is the right solution for the businesses that have a poor credit history and a low credit score. In addition to this, most small businesses and startups prefer to opt for this type of financing options, as it offers flexibility in terms of capital loan required and repayment terms. An MCA lender will basically provide you a lump sum cash amount on the basis of your average monthly credit card sales. In return, the lender will take some portion of your daily, weekly, or monthly credit card sales and receipts for payment purposes. One of the best alternative lending options these days is MCA, which is typically not considered as a loan. Having said that, if you are a business that can generate $5,000 – $10,000 in monthly credit card sales, you are eligible for a merchant cash advance.
Businesses that accept credit and debit card payments can easily get a merchant cash advance. The only downside is that MCAs have a higher upfront fee, known as holdback percentage. However, on a broader level, it is an affordable option where you do not pay more than what you have agreed to with the lender. MCAs come with higher approval rate, easy application process, and higher funding amount to all businesses.
Choosing Inventory Financing as a Business Capital Loan Option on Unsold Merchandise
Many small businesses overlook this type of financing option, which comes in handy at the time of need. Whenever required, you can easily take out the desired loan from a lender using your unsold merchandise as a collateral. This financing option makes more sense as you will be getting funds in return for what you already want to sell that is unused on your retail floor or warehouse. Another good business reason is that you do not gamble with the accumulated assets of your business as only the product that has to be moved is used to make the deal.
The amount that you receive in funding from inventory financing can be used for multiple purposes. For instance, you can use the loaned money in advertising the same product that you offered as a collateral. In addition, you can also use it to expand distribution channels or hire more employees to strengthen your workforce. Depending on your need, you can use the loan in ways that benefit your business.
Invoice Financing on Outstanding Accounts Receivable
Another kind of business capital loan is factoring invoice financing. In a highly competitive business world, there are higher chances that your customers or other people do not have sufficient funds to repay the money they owe you. As a business owner, this might frustrate you as a slow cash flow may hurt your company and its progress. However, with factoring invoice financing, you can easily turn the outstanding accounts receivable into a business capital loan. This is an ideal option for those businesses whose customers have outstanding debts to repay of 30, 60, and 90 days or more. The lender will study your case and take the money people owe you along with the time passed to evaluate the determining factor.
If the lender thinks that your case is legitimate and the outstanding accounts receivable deems to be collectible sooner or later, they will provide you the funding that you need to grow and expand your business. Roughly 80% of your total invoice bills would be funded to you immediately while the remaining 20% (plus the fees) will be funded once the amount is collected in full. Majority business owners have started to use this option as this was previously considered a painful financial crisis. Not receiving money at all from someone who owes you, is an irreparable damage. However, businesses who are looking to move on can forget about cutting back and opt for this business capital loan to get things on track.
Which Solution is the Right One for Your Business?
In today’s time, business owners have longed to find a business capital loan that offers utmost flexibility. This is covered by merchant cash advances that do not only facilitate the client’s needs but provide them the funding at the earliest. When we talk about conventional bank loans and alternative lending options, MCA is the fastest and most reliable solution to provide fast access to cash to all types of businesses – from retailers to restaurants and more.
Other options that are still facilitating small businesses and startups do not have a higher approval rate for their loan application. Thus, advances are the perfect option to get themselves the business capital loan required to grow. Even if you have a less than perfect credit score, you do not have to worry about being rejected for a merchant cash advance. That is not it, businesses have now found an affordable business capital loan in place of options that declined them for not having a perfect credit score. Here is why MCAs are a better option for small businesses and startups:
- Flexible repayment: MCA lenders offer flexible repayment terms that have to be fulfilled within two years’ period.
- Minimum requirements: There are minimum requirements and less paperwork involved when you are applying for an MCA. The initial application is launched online from the provider’s website.
- Quick approvals and turnaround time: Majority of the merchant cash advance applications are approved within a few hours to few days. The approval rate is also higher than other options available in the market for a working capital loan.
If you are looking to obtain a business capital loan in a short time to meet the immediate financial need, merchant cash advances are the right choice. You do not need to have a higher credit score or revenues to qualify. The only requirement is that you are a business that accepts credit card payments and the lender will provide you with the desired purpose.