Starting or running a small business requires a financial plan that supports your goals and enables you to continuously grow. In addition to the revenue your company brings in, there may be times when you find yourself in need of additional financial funding for your small business. Savvy owners know the financing options available, how to qualify for them, and how they can help.
Why Would I Need Financial Funding?
There are various reasons a small business, even a thriving one, may need to apply for financial funding on occasion. Some examples include launching a new product or marketing campaign, acquiring permanent real estate rather than renting a workspace, opening a new location, or building seasonal inventory. Whatever the reason, it is wise to be aware of how to obtain financial funding for small business endeavors.
Types of Financial Funding for Small Businesses
To determine which type of financial funding is right for your small business, compare the terms of various options with a trusted lender. Also, take into consideration the timeframe for repayment and how it measures up to your projections for business growth. Choose the option that best fits the needs of your company and your ability to pay off the debt in full.
Traditional Loans/Business Loans
A traditional loan/business loan is one with which you are probably already familiar. Typically, with this type of loan, you borrow a designated amount of money for a specified purpose and make predetermined payments on a regular basis for several years. The benefits are that your payment will not change and you may get a lower interest rate. However, with many lenders, you need to have a pretty good credit score and have been in business for a while.
Merchant Cash Advance
A merchant cash advance is based on the future revenue your company brings in via credit card sales. The lender will provide you with an advance amount to use right away, and you will pay it back by giving them a percentage of your daily credit card sales. The amount of time it takes to pay off this type of financial funding varies depending on the amount of sales you generate. If you prefer to have a payment that is lower when sales are lower, then this option may work for you.
Business Line of Credit
A business line of credit works in a similar style to a credit card. You will be approved for a total possible amount, but charged only on the amount you actually spend. This line of credit remains open for future use as long as you have not reached the total amount available, and the funds replenish as they are paid. These do not affect your personal credit, but a high credit score and good credit history are beneficial. You can often get approved quickly and qualify for a low interest rate, and this type of financial funding is often used for small business growth.
Unsecured Business Loans
With an unsecured business loan , you do not need personal guarantees, assets, or collateral. You also don’t need to have an amazing credit score or a long business history. You can use this type of loan for a short term solution and a starting point for building up your business credit history.
How Sunwise Capital Can Help
At Sunwise Capital, we put all our focus into financial funding for small businesses. We work quickly approve loan requests so that business owners can continue business as usual. Loan qualifications are less complex than the demands of a bank as we are dedicated to helping small business owners succeed.Contact us today to speak to one of our experts and get started!