Running a business isn’t easy. An emergency or unexpected expense can happen at any time. For a budding business, a burst pipe or a sudden backlog in inventory can grind operations to a halt or worse.
If you want to increase your business’s resiliency in the face of disaster, a same-day business loan can help give you the resources needed to stay afloat. Here’s what you need to know about this fast-paced form of business financing.
Unsecured Business Loan
If you need money quickly, then same-day small business loans are the easiest way to secure funds before the eleventh hour. An unsecured business loan is a loan where the borrower doesn’t have to put up any collateral to receive the funds.
These kinds of loans are excellent for protecting personal and business assets from liquidation, but they also tend to have higher interest rates and stricter application requirements. Lenders want to ensure that the companies they loan to will be able to pay back the loan, especially because it pays out so rapidly.
Line of Credit
Like a business loan, a line of credit is a form of borrowing where the lender establishes a maximum amount they are willing to lend to the borrower. The borrower can then elect to borrow as much or little as they want, up to the maximum for their business line of credit.
The benefits and drawbacks of this model are easy to see. It’s a simple way to acquire same-day loans for your business according to your terms. However, lines of credit are more challenging to obtain than other forms of loans, making them rare but effective.
Business Credit Card
A business credit card is hard to beat for small, recurring payments and managing individual business expenses. Much like a consumer card, a business credit card allows a business to use their borrowing account to quickly pay for services or business expenses to pay off later.
With some careful debt management, a business credit card can be a valuable tool to pay for services for your business while boosting your business’s credit rating. In time, a higher credit rating could allow your business to take larger loans, accelerating your growth.
In industries where customers are slow to pay invoices, invoice factoring allows you to maintain cash flow while waiting on slow payments. An invoice factoring service takes up your invoices and pays a portion of the invoice in a lump sum, giving you money immediately while the service collects the invoice for itself.
While this loan won’t apply to all businesses, it can still be a helpful tool for some business types, such as those in the manufacturing sector.
Merchant Cash Advance
Much like cash advances for consumers, a business can apply for a merchant cash advance to receive a lump sum of cash that is paid back automatically via credit or debit card payments over time.
These loans tend to have the highest interest rates due to their unsecured nature. Still, merchant cash advances can afford a business room to pay off immediate expenses and recover from an emergency.
Same-day business loans are best for emergency expenses and other dire straits. While each type has its pros and cons, there are plenty of options out there to keep your business afloat in the event of a sudden cash drought.
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