Successfully Securing Working Capital in Salt Lake City
If you’re a small business owner in need of working capital in Salt Lake City, your options are probably somewhat limited. The fact that yours is a small business, and because you may not yet be bringing in a profit, can put several roadblocks in your way when it comes to securing a traditional commercial loan. Learn of two alternatives, an unsecured business line of credit and a merchant cash advance, from Bear River Financial that won’t hit you with ridiculous fees or tie you up with undesirable loan terms.
Unsecured Line of Credit
By using an unsecured line of credit as a source of working capital, you don’t have to worry about interest or fees until after you’ve started using your line of credit. You also don’t have to worry about putting up collateral before you’re approved for funding. Advantages of this type of working capital in Salt Lake City include:
- Taking advantage of flexible payment terms, meaning you can make a minimum monthly payment, take care of the full amount owed or pay more than your monthly payment
- Gaining access to cash when you need it, rather than waiting before your funding arrives
- Having a reserve of capital for those times when business is slow or an unexpected expense crops up
- Being able to build your company’s credit in a way that’s separate from your personal credit
One word of caution with unsecured lines of credit is that you want to treat them like regular credit cards. This means paying them off as quickly as possible so you aren’t handing over a penny more than necessary on interest payments.
Merchant Cash Advance
If you do a lot of business through debit and credit card sales, then a merchant cash advance could be a great way to get access to working capital. The way these cash advances work is you get cash in exchange for a percentage of your future debit card and credit card sales. Rather than looking at this as a loan, know that you’re really just gaining early access to money you’re expecting to make in the future, so you’re actually borrowing money from your future self.
To pay back a merchant cash advance, you’ll make daily or weekly payments until you’re fully paid up. Bear in mind that fees are included with those payments. It’s best you take an honest look at your current profits to determine how quickly you’ll be able to pay off your advance. Additionally, try not to borrow more than you have to with a merchant cash advance; fees and interest can absolutely explode the more you seek to borrow.
Reasons you may feel a merchant cash advance is the best way to access working capital for your business include the following:
- There’s no need to submit a lot of paperwork before you’re approved.
- Merchant cash advances are also unsecured, so you don’t have to put up your home or car as collateral.
- Your repayment amount is based on your most current profits, so you don’t have to fret over a large payment during times when business is slow or unpredictable.
There’s no need for you or other business owners, no matter the size of your company, to feel stuck with standard commercial loans and the hoops that can come with them. Reach out to Bear River Financial to learn a new way of funneling working capital into your business.