7 Ways To Get Emergency Funding for Your Small Business
You have the perfect plan for your small business and everything thus far is running according to it. Unfortunately, something will go wrong and you will need money to fix it – and fast. When you need to consider business loans as a solution to your problem, it’s a good idea to have a fix on these seven ways you can get cash.
1. Utilize Credit Cards
Using your business credit cards is one way to get quick access to emergency funds. The interest rates will vary, but you can use your credit limit to purchase equipment, inventory or pay utility bills. In a bind, it is the fastest way to get cash.
2. Consider Factoring
If you rely on invoices to get paid, you may experience times where there is no money in the mail. You still have to make payroll and provide services for other customers – all of which require money. Selling your invoices to a third-party for a lump-sum payment can make up the shortfall.
3. Merchant Cash Advance
Your company takes credit cards, so why not use this system as a way to get funds? In a merchant cash advance, you get a payout pretty quickly. The repayment agreement takes money directly taken from your credit card proceeds daily, weekly or monthly.
4. Express Loans
Depending on your credit rating, you may qualify for an express loan. These applications are typically pushed through quickly, especially if you have assets to put up against it. These are not the fastest way to get money, but they are faster than traditional business loans.
5. Establish a Line of Credit
You can take out a line of credit against your assets, such as a 401K. The line of credit does not have to be used up in one shot – it can remain open for years.
6. Apply for a Short-Term Loan
Short-term loans are a great way to get access to emergency funds. The downside is the interest rate is typically higher and the payment terms equally high. However, if you need just enough money to get you through a short rough patch, this may work for your needs.
7. Find Investors
You may already know someone who is willing to front you some cash in exchange for a payment later on down the road. You may even want to keep the investor on as a shareholder in the company, thereby allowing you access to more cash in the future should you require it.
Business loans allow you to take care of your company when money flow is scarce. Knowing your exact situation can help you decide which route to go to get it.