The number one small business killer in the world today is simpler than you think. Over 80% of small businesses fail because of cash flow problems.
Tragically, a large number of those businesses might have been saved if the owners knew all of their options. They may go to the bank for a loan or a line of credit, get turned down, and assume that’s the end of their story. It’s doesn’t have to be.
There are other people and organizations that are willing to help you. Here are a couple of options for fast cash or funding thatmay bring your business back to life.
1. A Merchant Cash Advance
The merchant cash advance (MCA) is perfect for businesses that need cash in a hurry. You can apply online with a funder like PayvantCapital.com and potentially qualify for up to $500,000 in only 24 hours.
An MCA is not a loan, it’s a form of funding. This means it’s not subject to the same stringent regulations that traditional lenders and big banks have to follow. MCA funders are better positioned to help small business owners like you. In many cases, you can qualify if you’ve got $10,000 a month in transactions and you have been in business for 6 months or more.
Basically, you’re receiving an upfront sum of money and paying it back via a percentage of your future transactions. The nice part of that is that your payments are reflective of how well your business is doing. If sales are down slightly, your payments will be less.
2. Small Banks and Private Lenders
Big banks mean big regulations and bigger restrictions. This is why they’re only approving about 25% of small business loan applications. Smaller banks are currently approving about 50% of their applications because they’re not as tightly regulated and can relax their lending standards. This means you have better odds of getting a loan or a line of credit.
However, better approval odds and faster turnaround times come at a price. The cost of borrowing from these small banks may be considerably higher, compared to major banks.
You may also have to give up some financial freedom. If you get a line of credit through a smaller bank, you may have to file a formal request every time you want access to it, with a detailed explanation of where these funds will go. This is a bit intrusive and can slow down the process. For example, you might have to wait a business day to get the money to fix a piece of equipment that you need today.
They say that if you don’t ask, the answer will always be “No.” So, if you’re not investigating alternate methods of funding or borrowing, you could be missing out on the help you need to keep your business afloat.
Don’t delay! If you’re experiencing or expecting a cash flow shortfall in your business, look into the options above today! That way, help will be there when you need it.
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