You need business capital to grow your business but a bank won't approve you because your credit score. A traditional loan is no longer an option. However, you still have financing options still available at your disposal.
The first option is to get a business credit card. This is a great short term solution. Think of this like a one month revolving line of credit from a bank. Be aware that your business credit card will compound interest every month, let alone daily. So you never want to carry over a balance to the next billing cycle. If you are able to use the funds and pay off in full before the next billing cycle, business credit cards are a great option for you and your business. If you miss your payments, you will be charged late fees as well as the compounding interest. If you are not sure if you can pay off the balance before the next billing cycle, a Merchant Cash Advance (MCA) may be the best option for you.
MCA lenders could send a quick infusion of capital into your business bank account in 2 to 7 business days. The lender will review a minimum of 3 months of business banking statements to determine the amount of financing your business is eligible for. The lender factors in your sales record and will offer to buy a portion of your future sales. The term of the advance is typically 3 months to 18 months. You payback the lender through automatic micro daily or weekly payments until the payback amount is satisfied. The automatic micro daily or weekly payment can be deducted from your store credit/debit card terminal. If you don’t have a credit/debit card terminal, you can use your business banking account to payoff your advance. Payments are not typically electronically deducted on weekends or on bank holidays.
For example, the lender funds your business $10,000. You and the lender agree of a 15% holdback on your business processing terminal. In a day, your total credit card sales are $100. That means, only $15 will go towards your advance and $85 will stay in the business banking account. The process continues until the payback amount is satisfied. This is a great option for businesses with fluctuating sales. When sales are higher, you pay more towards your advance. When sales are lower, you pay less. If you don’t have a credit/debit card terminal, you can agree to payback the advance with a small specified amount your business banking account. This means you never have to worry about missing a payment or paying a late fee.
For any further questions, call Horizon CapitaI Investors at 646.853.9278.
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