Fast Working Capital Loans

Sometimes, in business, you need quick funding. An unexpected cost arises, and your bad credit doesn’t allow for a traditional loan. What do you do next? Thankfully, more sources of fast alternative funding are entering the market with each year that passes. At the South Florida Funding Group, we specialize in small business funding. Keep reading to learn more about fast working capital loans and other sources of finance.

What’s Working Capital?

You might hear the phrase ‘working capital’ lots as a business owner, but what does it mean? Ultimately, it describes the cash you have within the business to handle operational expenses that may arise in the coming weeks and months. Working capital is the money you need to survive from one month to the next. This includes the following:

• Utility bills
• Payroll expenses
• Inventory
• Unexpected bills

Typically, businesses of all shapes and sizes need access to funding to meet these working capital needs. If you’re considering quick funding, the important thing to remember is that you aren’t alone.

Fast working capital loans are designed to help businesses meet expenses when cash flow slows. You borrow funds, you pay short-term expenses, and then pay the funds back when cash flow improves once again.

Importance of Working Capital

Why should you consider small business funding? Above all else, it’s important to keep your working capital in a healthy position because this is what keeps the business running smoothly. If you don’t pay staff, they will lose motivation and you risk losing top talent. If you stop paying suppliers, you’ll lose access to raw materials, and the whole business stops. If you don’t pay utility bills, the office won’t have electricity and the business is affected once again.

With all of this in mind, working capital helps to keep the business running effectively. You pay bills, staff are motivated, and suppliers enjoy a positive relationship with you.

Fortunately, you have options when it comes to working capital these days. In this guide, we’re going to uncover fast working capital loans, equipment financing, merchant cash advances, and other forms of fast alternative funding.

With most forms of finance in this guide, you can use the money as you wish. Is there anything more frustrating than being told how to spend money as a business? Aside from specific financing, like equipment financing and leasing, you can spend the money on whatever you need. This includes inventory, payroll, equipment, cash flow, machinery, supplies, expansion financing, utility bills, and advertising.

Types of Fast Alternative Funding

Now that you understand the basics of working capital and why it’s important, how do you inject your business with much-needed funds? Well, the great news is that you have some options (options that don’t include filling out extensive bank loan applications).

While traditional bank loans offer strong interest rates, they also have many problems, especially for those who need fast access to funds. Not only are the application forms themselves long and arduous, but you’ll also have to wait several weeks just to hear if your application is successful. When it comes to working capital demands, you probably don’t have this time.

Of course, traditional bank loans also require the business and owner to have a strong credit score/report. If you have bad credit, you’re unlikely to have access to bank loans. Instead, you’ll need one of the following fast alternative funding methods.

1. Merchant Cash Advance

Firstly, we come across a financing option that isn’t exactly a loan but works similarly. As the name suggests, a merchant cash advance allows businesses an advance on their future income. If you know that good times are around the corner, perhaps you’re just waiting for a few clients to finally settle their invoices, you can get a short-term cash advance and then pay it back later.

How does it work? You borrow an amount that suits your needs before then repaying a percentage of future sales. These differ from ACH (Automated Clearing House) advances because, with these, you pay a set amount per month back rather than a percentage of sales.

With the South Florida Funding Group, you complete the application process (something that only takes up to 48 hours) and then wait to hear back. Normally, you only need three months in business to get started and you can borrow up to $500,000. Depending on the alternative funding agreement, you’ll pay the amount back over four, six, ten, or even 18 months.

2. Invoice Financing

Like merchant cash advances, invoice financing allows you to borrow against invoices you’ve sent to clients. As a small business, you’ll know the pain that comes with waiting for clients to pay invoices. Bills are arriving on the welcome mat and there’s only a certain number of times you can prompt clients for payment.

With invoice financing, you get quick funding while waiting for clients to pay their invoices. One of the benefits of this option is that clients don’t need to know that their invoices have been financed. Naturally, the lender takes a small percentage of each invoice. For example, the lender might pay $800 for an invoice worth $1,000. Then, the lender receives the full amount when the client finally pays.

While you do lose a small percentage of each invoice, you can cash in on invoices now rather than waiting for the full amount later. As mentioned, clients don’t need to be aware of the agreement (don’t worry, they won’t suddenly get bailiffs knocking on the door!).

3. SBA Loan

This time, we’re heading back to the world of loans. You might have heard about SBA loans, but do you know how they work? Or even why they’re called SBA loans? Firstly, we want to quash the rumor that SBA loans take several weeks to activate. While the application process for SBA loans is traditionally slow, you can use services like the South Florida Funding Group to speed it up.

Essentially, an SBA is a standard business loan but with a large section of the amount secured by the Small Business Administration. Every year, the SBA secures numerous loans to help small businesses get the funding that they desperately need. Provided by a federal government agency, SBA loans are completely legitimate and helpful when it comes to working capital.

As well as working capital, you can use SBA loans to refinance debt and for expanding your business. Generally speaking, you’ll need more business experience for this loan and the documentation is longer than a merchant cash advance. Yet, you can borrow up to $10 million while repayment terms extend to 25 years for major contracts.

4. Equipment Leasing and Financing

Next up, you’ve probably guessed but this next form of fast alternative funding is designed for those who need to buy equipment. One of your machines broke down recently and you don’t have the cash to replace it? If this is the case, you can either lease or finance the equipment.

With leasing, you borrow the equipment and pay a monthly fee for the privilege of using it. Sadly, you’ll never own the equipment and will lose it as soon as the lease is over. On the other hand, you normally benefit from maintenance and other extras since the manufacturer still owns the equipment.

With financing, it works like a mobile phone contract. Therefore, you’re buying the equipment with the cost spread over a certain period. The loan is secured against the equipment itself and, when all the payments are made, you’ll own the equipment. If you cannot make a payment, you’ll lose the equipment. This is a solid option for those with bad credit since the equipment acts as the security for the loan amount.

Whichever you choose, you should get a decision inside just one day (it doesn’t get better than that for quick funding!). You’ll need three months in business and the application process is just one page. Depending on your needs, you can get equipment of any value up to $1,500,000. From here, you’ll then repay the amount over between six and 24 months.

5. Secured and Unsecured Small Business Loans

Next, another fast working capital loan comes in the shape of secured and unsecured small business loans. The route that you choose depends on whether you want to secure the loan with an asset or through your creditworthiness. Secured loans are like traditional loans where the lender will secure the amount against an asset. On the other hand, an unsecured business loan will need credit checks (it’s not therefore the best option for those with bad credit).

Another detail to note about unsecured business loans is that you’ll normally need a personal guarantee. In other words, fail to meet the repayments and you will be personally responsible.

Generally speaking, most people get quick funding with a fast application process and funding within a couple of days. During the application process, you’ll need to provide one page of information and a banking history of the last three months. In terms of money, you can ask for between $10,000 and $500,000.

6. Business Line of Credit

As the name suggests, the next small business funding option we want to talk about is similar to a personal credit card. If you don’t have specific needs for funds but want the security of knowing that money is available, a business line of credit is the way forward. The South Florida Funding Group offers unsecured business lines of credit which provides working capital whenever you need it.

One of the benefits of a business line of credit is that it offers flexibility - you use the money however you want, whenever you want. Of course, you might not need to dip into it at all. While you can only use a loan once, you can keep using your line of credit just like a credit card. As long as you don’t let it spiral out of control, your line of credit can stay with you for many years (and help build the business’s credit score).

In many cases, businesses complete the application process within 48 hours and receive funding within three days. This is a fast alternative funding method, and you only need six months of experience to apply; the one-page application is simple, and you can get up to $500,000 of credit. Some solutions also provide favorable repayment terms.

Fast Working Capital Loans

If you need fast alternative funding, you’ve seen some of the best solutions in this guide. While some companies in need of equipment will choose financing or leasing, others want access to funds whenever they need them, and this comes in the shape of a business line of credit. If you’re worried about quick funding or bad credit, contact the experts at the South Florida Funding Group today.

It’s important to choose the right small business funding option for the future success of your company. With the wrong small business funding method, you not only affect the short-term health of the business but also the long-term prospects. Before choosing a solution, grab a piece of paper and write down your needs.

What do you want to achieve from a fast working capital loan? Do you want a quick application process? A solution with no credit checks? Favorable repayment terms? A specific amount? Whatever you need, write it down before then comparing how the above solutions meet these needs.

The South Florida Funding Group has plenty of experts ready and willing to help. Contact us today and we’ll talk about your business, your credit, your need for funds, and fast alternative funding options. With decades of experience in the field, we’ve helped businesses of all shapes and sizes that either can’t qualify for a traditional bank loan or need something much faster.

Working capital is essential in any business, so don’t fall into the trap of taking it for granted!