If your small business is experiencing some sort of financial emergencies and you need real quick cash to get rid of them, you will not have the free time to apply for an SBA loan or to find out new investors or you may not have enough personal financial savings to help you out from this situation. Sometimes, however, quick financial injection from small business funding sources helps everything else.
Whether it is because of a seasonal downturn, an unpaid invoice from a customer or even some other type of hard time, at some undetermined time, lots of small business owners find themselves short on cash, too short that they even can’t make payrolls, make an emergency repair of an equipment or machinery, or carry out another financial obligation.
As a business owner you understand that it is not all that unusual and also you can’t have so much time to wait for the funding. If you really are stuck in this type of situation, what should you do?
Fortunately, there are some small business funding sources for getting quick cash infusion for your small business. What you actually need to do is to explore them and review all of them to determine, which small business funding option is best for you after considering the costs and other factors. Here are five small business funding sources you can get cash within a day or so.
- Online Lenders
There are some online lenders who conduct all the lending process on the internet. With online lenders, you can complete an online loan application provided on their websites in just a couple of minutes and get the required funding in as little as 24 hours if you present all the required financial documentation immediately. Generally, this type of lending takes a couple of days for the approval; however, there are some online lenders who can approve you on the same day. Look Into the borrowing limits for which you can meet the requirements. You should also need to keep in mind that the cost of this type of borrowing is somewhat high.
- Invoice Factoring
Normally you have to wait for 30, 45, or 60 days, or in some case more to collect your invoices from your customers. However, you can factor these invoices for the quick cash infusion in your business. By factoring these invoices, you will get a discounted amount, so the cash amount you get reveals the factor’s fee, which is usually 2% or more, depending on your business industry, your customers, and many others. It generally takes more than a few days to set up an account with a factor. As soon as this has been carried out, you can submit invoices at any time and usually receive the cash in just a day.
- Business Line Of Credit
In case you have a line of credit in place in your business, you can get some cash from it whenever you like as much as the size of your line. In this line of credit program you only need to pay interest on the amount that you use.
The volume of your business line of credit relies upon the common loan standards. These include capital or what your business is really worth, ability to hold debt, collateral that can be sold in case you don’t pay off the borrowed amount, character, number of years in business, whether there’s been any bankruptcy in the past, and some other elements.
- Merchant Cash Advance
Merchant cash advance is another quick funding solution. You can also use your business credit card’s cash advance amount if you need cash quickly. You can tap into your limit through an ATM or get more than the ATM’s limit in the bank. The cost of money through a cash advance is excessively high, so you need to use this type of program only for a small amount of cash, but as a last resort.
- 401(k) Business Funding
In case you have a 401(k) plan in that you take part and the plan allows members take loans, then this can be a terrific source of quick cash. In this 401(k) plan, the maximum amount that you can get is about 50% of the vested account balance. And in case your vested account balance is less than $10,000, then you can borrow $10,000. The 401(k) business funding only takes as long as the administrator needs to process it. In case you’re the administrator, this process can be real quick. The good thing about this loan is that the interest rate can be quite low and the repayment term is over 5 years, without any prepayment penalty in case you want to pay it off earlier. The only disadvantage is reduction in your retirement savings while the funds are out of the plan, and you can subtract the interest.