Virtually all small businesses will eventually need financing in order to grow, and in some cases just to cover daily operational expenses. If you’re not sure which kind of financing would work best for you, consider some of the options described below.
Business Lines of Credit
These are probably the most flexible form of financing you could possibly arrange for. There are two types of credit lines, those being secured and unsecured. Secured lines of credit call for you to put up some form of collateral, while unsecured business credit lines require no collateral, but will generally carry higher interest rates.
These type of loans are always in high demand, because the federal government will guarantee up to 70% of the loan amount with a conventional bank. It’s usually a bit more difficult to qualify for an SBA loan, but if you do qualify, you will find plenty of banks willing to work with you.
Accounts Receivable Financing
This is a form of financing in which you sell an asset you have to an alternative lender in exchange for immediate cash. One of the most commonly used assets in such transactions are invoices, so if you have a high volume of expensive invoices, this type of financing might work well for you.
Merchant Cash Advances
The way this transaction works is that an alternative lender would provide you with an upfront sum of cash in exchange for a daily or weekly percentage of your credit card sales. There is no actual loan involved in this process, and the amount you repay is very flexible, being tightly associated with the volume of your credit card sales for any given period.
These kinds of loans are generally fairly easy to qualify for, because the collateral for the loan is built right into the equipment being financed. For instance, if you wanted to secure a loan to purchase a new tractor-trailer, that vehicle would actually serve as collateral in the event that you defaulted on the loan.
Would Your Small Business Be Helped By a Business Loan?
Most small businesses find themselves in need of financing at some point in their life cycle. Contact us at Magis Funding when you need a business loan that will help you to expand, or to cover operational expenses.