Over the past few years, unemployment rates have increased to higher levels than ever before, which has resulted in many people deciding to start up their own small businesses instead. While small business ownership is a good thing, many entrepreneurs can in fact benefit greatly from using small business loans or other types of business funding to help them get ahead.
It Acts as a Safety Net
Many small businesses have not been in operation for long enough to have been able to build up a reasonably-sized company savings account. As a result, they often run into severe financial difficulties if their businesses experience more than one or two quiet months in a row. Being able to secure some sort of funding to cover necessary running expenses during these times will often make all the difference between businesses being able to keep their doors open or having to close up shop permanently.
It Provides Investment Capital
At some time or other, almost every small business owner dreams of the day where he or she will be able to stand head and shoulders above competing businesses in their industry. However, in order to do this, additional funding is required, which most small businesses simply do not have. Funds obtained by means of small business loans can normally be used to improve or enhance any infrastructure and business-related equipment or cover the cost of any training courses that may be required to improve business skills.
It’s a Low-Interest Loan Option
Although numerous smaller businesses desperately require additional funding, many of their owners make the mistake of applying for the first loan option that they can find. This can become extremely costly because of the fact that the business does not yet have any proven financial track record, credit rating or any form of collateral to offer. Dedicated small business loans can sometimes be quite challenging to qualify for; however, business owners who are successful in receiving them will normally find that interest rates and repayment terms tend to be far more favorable than those of standard loans.
An Alternative to Traditional Business Funding
Unlike regular loans where fixed repayments have to be made each month, a business cash advance provides small business owners who use merchant credit card services with additional cash when it is most needed. This is done by enabling business owners to receive a cash lump sum in lieu of future card sales that will be made. The amount that is borrowed can then be repaid as funds become available to the small business owner, and two of the only restrictions to being allowed to apply for this type of funding are that a business needs to have been in operation for 12 months or longer and that it has to have at least one brick and mortar location.
If you are a small business owner that has been operating for longer than a year and you have an excellent credit record, your chances of being approved for a business cash advance are relatively high. At the end of the day, it makes far more sense to use a business cash advance than it does to apply for traditional loans. Before applying for any other type of loan, feel free to contact us to determine whether you will qualify for a business cash advance.