Using Nontraditional Financing to Keep Your Business Moving

By: David Castro

What happens when dedication and a love of the job aren't enough to pay the bills? Every business reaches a point where they need some extra working capital to pay bills, expand operations, improve marketing, or any number of other activities. Finding money can be a challenge, especially if traditional bank loans don't work for your current situation.

Most bank loans rely on a set of criteria that can be extremely difficult for a small business owner to meet. If you have no collateral for a secured loan, finding the cash you need may seem almost impossible.

As long as your business has a steady flow of income each month, you may be able to qualify for unsecured business loans or unsecured business lines of credit. These cash sources can give you the working capital you need in much less time than a traditional bank loan. In many cases, same-day or next-day approval is possible.

These loans are attractive to small business owners who know they'll have steady income in future months, but don't have the financial history or collateral to qualify with a bank. In some cases, the interest rates on unsecured business loans can be higher than bank loans. More often, though, the rates are competitive.

Another source of financing that many business owners are not aware of is the merchant cash advance. A merchant cash advance is a quick way to get needed funding for your business that relies on your future credit card transactions. If you have a reliable stream of credit card transactions coming in every month, you can use your future transactions to fund a cash advance right now.

A merchant cash advance differs from the unsecured business loan because instead of paying back a loan each month, you are effectively selling your future credit card transactions to the financial institution at a discounted rate. This is an innovative and convenient way of getting access to additional business funds that has proven remarkably helpful for many business owners.

As with any type of loan, you should only take on unsecured business loans, unsecured business lines of credit, or merchant cash advances if you are sure that you will be able to meet the financial obligations that they present. Since these funds are unsecured, you won't lose your house if you fail to pay but you can severely damage your credit.

The best way to ensure that you will be eligible for loans, lines of credit, and other funding options in the future is to build and maintain good credit. This will ensure that you are able to get funding when you need it.

For business owners, getting access to funds is sometimes a necessity that simply cannot wait. When you need to pay your employees, launch a new marketing campaign, or just pay for everyday business expenses, getting the money you need can be fast and easy. Unsecured business loans, unsecured business lines of credit, and merchant cash advances are all very useful tools to provide you with the working capital that every business requires.

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