What You Need to Know About Alternative Small Business Loans
Many small business owners are turning to alternative sources to secure capital for their businesses. Whether they lack collateral to secure a traditional loan or are having trouble getting approved because of their credit histories, more and more people are looking for a way to finance their businesses without relying on bank loans to make it happen. People secure loan alternatives for a number of reasons: changing location, purchasing inventory, expansion, covering operational costs, and buying new equipment, just to name a few. If you’re a business owner looking to expand but wondering where the money will come from, here is some background information on alternative small business loans to get you started.
Questions to Ask
Before you begin the loan application process or seek out an alternative small business loan, it’s important to ask yourself a few questions about your business to find out which option is best for you. For instance, how long have you been in business? What is your repayment schedule? How quickly do you need the money, and what is it for? How much do you need, and can your business support repaying the loan in its current financial shape? Once you know the answers to these questions and the amount of money you can afford to borrow, it’s time to start checking out your options.
Merchant Cash Advance
A merchant cash advance, or business cash advance, is similar to a traditional loan in that businesses receive money up front that they incrementally pay back later. This is one of the most popular forms of alternative funding that business owners are turning to. Usually, a merchant cash advance is paid back using an agreed-upon percentage of credit card sales until the loan and interest have been repaid. Sometimes a fixed amount is paid from the business’s merchant account. Cash advances are calculated based on the business’s monthly revenue.
Alternative business financing methods often get you money much faster than bank loans or lines of credit, sometimes within as little as 24 hours of applying. They often don’t require collateral to secure the loan, and the approval process is quite a bit less involved than when applying for a loan from a bank or credit union. These are some of the positive aspects of alternative small business loans. Of course, interest rates will typically be higher than those associated with traditional loans because of the ease of access and quick approval. For this reason, it’s important to have a repayment plan, no matter what kind of loan you apply for.
If you’re interested in exploring alternative small business loan options, contact Horizon Business Funding today. We specialize in providing alternative funding with a fast approval time and no collateral, personal guarantee, or business plans required, so you can operate your business without worrying about bank loans or an unfavorable credit history. If your business has been denied a bank loan, there are other options. Call us at 888-487-5509 and finance your dreams today.