Businesses That Need Cash - Fast
As a business owner you’ll experience times of plenty and times where you’ll need to tighten up your belt. Whilst you hope that the tighter times are far and few in between, sometimes you’ll need smaller or larger amounts of cash to either see you through a tough period or to expand your business. Being prepared to scale up or down is half the battle to surviving in a modern business.
So how can you secure cash fast?
As you know only too well, business ownership can be unpredictable, so having a good finance broker can mean the difference between make or break - especially for small business owners. Here at Bear Loans we can help you secure fast cash, to ensure your work flow stays on track. Even when times are tough, we have options for when your unexpectedly caught a little short:
1. Equipment finance
For those of you in the hospitality industry or building industry, you’ll know only too well, what happens when your equipment fails you. You can be heavily reliant on your coffee machine working or your tools of the trade. Even those of you utilising a van or delivery truck can come undone, if these things have suddenly died on you! In these circumstances Equipment Finance could be the best option.
Rates for these loans are relatively competitive at around 5-8% and where a ‘Chattel Mortgage’ is elected on a commercial vehicle for example, borrowers own the asset from day one and can claim GST payments in advance. This enables better cash flow, along with interest and depreciation returns. This loan can be a great solution, as its structured, safe and as an owner, you have added tax benefits.
2. An Unsecured Business Cash Loan
If you’re an established business that needs cash super-fast and you’re not having any joy with your bank, an unsecured business cash loan is a great alternative. You won’t have to use your business or personal assets as security. Plus its usually really fast - with most loans being approved within 24 hours.
This type of loan wouldn’t suit a start-up, as approval is based on how long you’ve been in business, your monthly net sales and how long you’ve been at your current premises. If you’re short on wages or rent this month and you meet the criteria, this could be a great quick finance match for you.
3. Equity Release
Do you have an existing home or property? If so, you could cash-in on the equity you have built to secure your additional funds. There is a risk associated with this loan, (as your property is on the line to secure it) however with careful planning and expert advice, this facility could provide certainty for you and the lender. Planning this loan correctly can mean reducing your overall interest and repayments that are usually associated with commercial rates. This could be an excellent choice for you, if you have the equity available and a great finance broker to get your loan, business plan and strategy aligned.
4. A Payday Loan
If your credit history isn’t that great and you’re only looking to borrow a smaller amount to see you through a shorter period, due to cash flow issues - a Payday Loan could suit your needs. Interest rates tend to be higher, (20%) however they’re fast, (usually settled in 24 hours) and are easy to establish.
These loans are suited to emergency situations. Maybe you’re waiting for that cheque to clear but in the interim you have those freelancers to pay. You don’t want your productivity to be affected, which would counteract any higher interest rates in the shorter term. You’ll need a business with good cash-flow projections to ensure you can meet your repayments.
5. Merchant Cash Advance
A lender can purchase future business transactions in order to lend you a cash advance. These loans are designed to match your cash flow and can be a fast transaction. They essentially provide a lump sum in exchange of a percentage of your future sales.
This type of loan wouldn’t suit a seasonal business or those that experience large peaks and troughs. However, they would suit a short-term need, (usually over 3 months) and can be a great alternative repayment solution.
If for any reason you find yourself falling short of cash and your business would benefit from some speedy finance, we recommend you talk to us, we can recommend the best solution for you, one that benefits your business in the short term and to help ensure your business doesn’t experience this cash-flow predicament again. There are many reasons a bank will turn down a small business but many more why we won't.
*This information is not to be relied upon without speaking to your finance broker, tax agent or financial adviser.