If you find banking funding rigid then you will know more have to worry. There are various flexible funding options available out there. These financing options have made keeping in mind modern-day business requirements. Depending on your business need you can go for any of the following financing methods:
Traditional Bank Fund
Whenever we think of getting a fund for the working capital, the traditional method of getting funds from the bank is the first thing that comes to our minds. Maybe because this method is the oldest and more trusted. Banking systems are evolving with time, they have started to offer plans for small businesses too. Enquiring a bank for knowing their plans before finalizing, is the right way to get the funds so that you can have an idea of how long you will need to pay back the amount you borrowed.
Merchant Cash Advances
Merchant cash advances are a short-term business fund provided by MCA companies in exchange for a percentage of future credit or debit sales. It is an easy funding method that provides quick access to the fund. MCA gives repayment flexibility and the approval rate is higher. But also, with MCA you are likely to be at lower risk.
Business Line of Credit
A business line of credit is a flexible fund that provides a definite amount of money that can be accessed in a short period. It requires a business to consent to some assets or collateral to secure the capital. It is a valuable financial tool that can help in accessing capital quickly providing you with a flexible repayment schedule. Hence, a Business line of credit helps you in handling cash flow gaps, address an emergency, and access more working capital.
Through invoice financing, small business owners can borrow money against the amounts due from customers. It is a quick financing solution and it focuses on business growth. With invoice financing, there will be no risk of late payments and default payments. Invoice financing helps in resolving major financing issues without burdening the business with debt. It has three categories: invoice factoring, invoice discounting, and selective invoice finance.
SBA is an abbreviation for Small Business Administration. It has come forward to help all types of small businesses grow by offering them various funding options. Also, one such plan is PPP, which is the Paycheck Protection Program. It provides low-interest funds for working capital. Even if the business is in the starting stage of implementation you can apply for the funding. As SBA funding programs do not follow traditional banking methods, the chances of getting faster access to the capital are high.
Advantages OF Alternative Funding
- The application process is simple. It does not require lots of paperwork. Because of this quick funding is possible. Also, the chances of approval are higher.
- Alternative funding options are flexible. You can repay the amount according to your convenience. It does not pressurize you as the traditional method does.
- There are a variety of funding options available. You can have access to any without experiencing difficulty.
So, there are plenty of alternate funding options for your business. You can roll your eyes and drop into the perfect plan fulfilling your business needs. With the good financing option, you can be able to factor in as well as keep your other financing.
Before you jump to the conclusion you will have to know what kind of funding you are looking for? You want long-term refinancing, or want to pay off debt, or you need urgent cash. Research well and get familiar with all the funding options before applying.