How to Get Business Loans for Daily Operations
Take your business to the next level and balance your cash flow issue by taking advantage of a business loan. Learn more about how business loans can help your company with daily operating expenses and find out if you qualify for a competitive loan.
Your working capital, or operating capital, is essential to handle a range of routine expenses, emergency costs and unique investment opportunities. Without a solid working capital account, your business may be feeling strapped for cash and struggle to maintain normal operations. Instead of cutting back, grow your business by taking out a loan.
A business loan designed for operating capital helps you make timely payments for all your necessary operating costs. From payroll to inventory, look for a loan that covers your expenses and offers generous terms. The most common options for a working capital business loan include bank loans, SBA loans, alternative funding and a cash advance.
Bank loans are perhaps the most difficult to secure. Most loans from a bank require a significant financial history and credit score in order to become approved. However, they also offer some of the best terms for a working capital loan. Whether you need a long-term or short-term repayment plan will affect your interest rate, but you can expect to receive reasonable rates and flexible financing.
SBA loans are very similar, but are distributed by the Small Business Administration. This means that you must prove you’re a small business. While the credit requirements are lower, you’ll have to fill out a significant amount of paperwork to apply.
Alternative funding sources commonly offer hard money loans. These loans are the most flexible form of financing, but also come with higher interest rates and risk. You’ll need to provide an asset to use as collateral to become approved for this type of loan, but you typically don’t have to undergo a credit check. Hard money loans have the highest interest rates, but allow you to spend your working capital on anything you deem necessary.
Finally, you can take out a cash advance to pay for your current expenses. While not technically a loan, a cash advance simply gives you your future payment today. You’ll receive all but a small percentage of your future payment immediately, and simply make payments on it to your lender. Compare each of these business loans to find the best option to grow your business and avoid late fees or missing payroll.