While owning your own business offers you a variety of benefits such as being your own boss, you still have to take on the responsibilities that any company owner would have to do, one of which is securing and stabilizing finances.
Depending on the market and the success of your business, you may find your business to be running short on cash. If this is ever an issue, do not fret. As a small business owner, you have a few options to explore before having to settle for a high-interest loan from a traditional bank. The following are options for small business owners looking to get some cash to hold them over until they get back on their feet.
Merchant Cash Advance
A merchant cash advance provider offers you money upfront in exchange for a portion of your sales via credit and debit card sales. It is a quick and easy way to get money without having to provide collateral upfront. You can apply for a merchant cash advance, even if you don’t have a high credit score, which makes the approval process a breeze. The merchant service provider will take a daily deduction of your business’s credit card receipts which in returns will decrease the amount of cash the business will receive, but overtime will pay back your cash advance.
Crowdfunding has been a particularly popular way to fund small businesses in most recent years. Crowdfunding utilizes social media as a way to reach a broad audience who may want to contribute a donation to your business. Donors’ contributions can range, but if your campaign reached over a thousand donors who donated at least $10 each, it could create a lot of cash quickly.
Some of the most popular crowdfunding sites include Kickstarter, GoFundMe, Indiegogo, Fundable, and Pateron. The catch with crowdfunding, however, is that you must create an engaging story that will capture an audience’s’ attention and convince them to support your reason behind the funding. Typically businesses who utilize crowdfunding will offer their investors to a new product or service at a discounted price.
Microloans are small, short term-term loans that have a low-interest rate. Microloans are great for small businesses who only need a small amount of money, between $500 to $50,000. Fundera.com explains that banks are more likely to turn down loans less than $50,000. In general, microloans also offer more flexibility when it comes to credit history as well as monthly payments compared to a traditional bank loan
To conclude, merchant cash advance, crowdfunding, and microloans are all options available for small business owners. If you ever need money quickly, all of these options can get money in your pocket as soon as possible so you can continue to orchestrate your business.