Financing gives companies the boost they need to recover after difficult times. Because of the numerous options available, it is imperative that business owners conduct research to find the funding choice that best fits their situation. Here are some possibilities that can give your business the necessary capital to see you through rough patches.
When you acquire a business term loan, a financial institution lends you a lump sum and you pay in back in regular increments over a predetermined period of time. These are usually classic traditional bank loans. Lenders will look at your credit score, collateral, time in business, and revenue stream. Once the loan is approved, you can use it for whatever your company’s needs are.
Short Term Loans
If your company has a pressing, immediate need, as long as you qualify you can usually obtain a short term loan quickly. However, the repayment schedule is quick as well; be prepared to pay it back in one to three years.
Lines of Credit
The main advantage of a business line of credit is that you have funding available whenever you need it. The best time to apply is when you don’t yet need it, so it is ready when you do. Because lines of credit are revolving, after you have paid back the funds you have borrowed, you can draw on them again when necessary.
Business credit cards offer another type of revolving credit line. Even if you don’t qualify for other forms of financing, you can use your company’s business credit card to handle urgent expenses, and as long as you handle the payments responsibly, you can build your credit score at the same time.
Equipment financing involves loans specifically designated for the purchase of equipment. Qualifications for this form of funding vary among lenders, but one advantage is that usually the equipment you buy serves as collateral so no other form of collateral is necessary.
Accounts Receivable Financing
Accounts receivable financing takes advantage of unpaid invoices by using them for funding to stabilize your cash flow. With this form of financing, lenders also usually assist you in collecting payments from clients.
For more advice on financing businesses, contact Prosper Lending Firm.