Increasing manpower, stocking up on Halloween Decorations to last the coming season, giving an aesthetically pleasing makeover to your café, or covering payroll – a lot goes behind the scenes that require enough working capital. The fact that you are here means you are looking for ways to manage operation costs to keep the ball rolling with empty pockets.
You aren’t the only business owner with this condition; this is global. Money is the dragging force behind every business. Be it a home-based business or a multinational company, both need an influx of consistent cash flow to succeed? Will you be able to manage the day to day operations or invest in another project if you are running out of cash? Luckily, small business loans are there to help!
What makes Cash Flow so important?
With adequate cash flow and decent credit score, no lender will put ‘the rejected’ stamp on your application. But what to do when a small business owner needs a loan with insufficient balance and non-existing cash flow? Cash flow tends to be the most crucial requirements for a small business loan, making it the only concerning factor for the lender. If a lender thinks of you as a defaulter, your chances of loans approval are slim. The math is simple here, you expect the borrower to offer $2,000 as a loan amount with a history of only 800 dollars resting in your account, and will you be able to make the repayments on time? This is the very reason why small business loan lenders consider the owner with low credit as a risky candidate.
Reasons Behind Zero Credits
Before we dive in and explore places that overflow your business with extra cash flow, let us probe into the factors leading to your current financial position – zero credit history.
Majority of the small business run on contracts and often times small business owners have to wait for a certain amount of time to receive payments. With hands tied due to lack of money, a business can’t grow forward, and in order to start the new project, you need to streamline cash flow. Some business managers make the mistake of spending all the ‘last-resort’ money, left with no financial anchor.
Often times, small business owners forget to devise a plan to support the growth of their business. They keep on working with the startup numbers and now that their business is growing, they lack resources to cater to the demands of the customers. To have a consistent cash flow, make sure your business plan ensures the growth of your small business without getting it hampered.
Lastly, mixing personal and business finances is not a wise idea. With the passage of time, it gets difficult to separate the funds that are supposed to finance a vacation from the funds that are needed to repair a broken piece of equipment.
Keep these factors in mind and use the incoming cash flow to boost your capital. Before that, you need to get enough cash to keep the machine running. You can get adequate cash from the following small business loan options even with a bad credit score:
- Business Credit Card
If you need funds to cover payroll or rent, the amount from a business credit card is not enough, but it is sufficient to cover short-term financial needs. Most importantly, the banks offering credit cards only look for creditworthiness, they don’t look for cash flow. If you think your business can benefit from a credit card amount, then this is the most convenient funding option.
- Equipment Financing
The loan application and approval process of Equipment Financing is different from the traditional and term loan. Without offering collateral, you can be approved for Equipment Financing. With offering this type of financing, the value of the equipment is the same as the value of the credit profile of the business owner. So upgrade your crib’s equipment at an affordable rate.
- Invoice Financing
If you have outstanding invoices from the customers, Invoice Financing is your safest bet! The lender will front you up to 90%, and after you have made all the payments, you will get the remaining amount minus the lender’s fee.
Getting a loan with insufficient credit history is hard, but with these financial and funding options, you can take your business to the path of success.
Merchant Advisors aims to provide every possible funding to small business owners, head over to our website, and explore all the small business loan options. For more information and tips, follow us on Facebook (@Onlinecheck) and Twitter (@Onlinecheck). If you have any query, our financial advisors can get back to you. If you have any question, feel free to call us on our toll-free number at (833) 827-4412, our loyal and keen financial advisor will answer your every question and guide you throughout the way.