4 Ways to Get the Money You Need for Your Small Business
If your small business is a little short on cash, there are a variety of different ways that you can get the money that you need to keep your small business going. Here are four different ways you can gain access to additional money for your business.
#1 Invoice Factoring
Invoice factoring is a way to get the money you need to pay for day-to-day expenses. Invoice factoring is based upon unpaid invoices that your business has accumulated. With this type of loan, the amount of money that you are offered is based on the amount of unpaid invoices that you have. The money from your invoices goes towards the company that offered you invoice factoring.
#2 Business Line of Credit
A business line of credit is similar to a line of credit that is offered to individuals. Is is based upon your credit history. Generally, business lines of credit are offered by banks that you have an established relationship with. The extend of your line of credit is based upon your banking history. It is based upon the amount of money that you have coming in and out of your account on a regular basis. With a business line of credit, you can borrow exactly what you need and pay it back with a low interest. You generally are given a couple of months to pay back the loan.
#3 Working Capital Loans
These types of loans are designed to give you money to cover the cost of purchasing either equipment or inventory. This type of loan gives you the money you need to buy the things that you need. The interest may be a little higher than a traditional loan, but not too exorbitant. With these types of loans, you typically get the cash rather quickly, which is part of why the internet rate is a little higher. You should be given a set number of months or years to pay off the capital loan, based upon the amount that you borrowed.
#4 Business Expansion Loans
Another loan type, which generally requires a bit more paperwork but also generally comes with a slightly lower interest rate is a business expansion loan. A business expansion loan provides you with an upfront amount of cash and a set payment period, generally of a couple of years. This can be used to expand your business in a variety of ways, from hiring new staff to purchasing new equipment or expanding to a larger location.
There are a lot of different types of business loans that you can get for your small business, based upon invoices owed, credit worthiness, and business revenue. The type of loan you end up getting depends on what you need the loan for, the type of repayment terms you need, and your financial situation. For more information, talk to a business like Wilmington Jewelry & Loan that deals in short-term loans.