As many of us have are well aware, the current economic climate, although in recovery in the UK, can still make the going tough for small businesses. In order to maintain a smooth running operation, you sometimes need a fast financial solution to help your business to expand and succeed, but what if your company needs an alternative to standard small business loans for whatever reason?
Even with the best credit record, obtaining finance or investment through traditional bank sources has not been easy and although the government has helped with the Enterprise Lending Scheme and various grants, not everyone has easy access for their business. Fortunately, there are sub-prime lenders offering finance for those willing to risk their credit rating further, but that route is very much a double edged sword because not only do you pay higher rates of interest, you are instantly placing pressure on your business to produce for repayments.
Alternative Lenders Welcomed by SMEs
The financial crisis of the last five years has brought about a new kind of investor to help small businesses. There have always been business angels, but receiving investment from an organisation that clearly has the money spare often means sacrificing a portion of your business' equity. The problem with this is that just like venture capital, they are unlikely to invest in your businesses unless you would eventually arrive at your goal off the strength of your own drive and determination.
Business cash advances are one of the fastest growing sub-prime routes to finance for small businesses because they are a completely flexible way of accessing funding with very little hassle, but are nonetheless, a very ethical financial product, which is a breath of fresh air. Funders provide unsecured business cash advances based on the credit or debit card turnover of your company, whereas a small business loan is determined on your business' ability to meet repayments, which is not ideal if you need investment to expand.
What are the benefits of an Unsecured Business Cash Advance?
- You do not need cash upfront as with a regular small business loan. If you can prove your company has a healthy credit or debit card turnover you can obtain an unsecured business cash advance in next to no time at all, usually within 10 working days following approval
- Your repayments are set to an amount your business can afford based on your credit and debit card turnover. Of course, this also has the added bonus that your repayments are made when your customers are paying you and only if they pay you. Have a bad month and so does the investor.
- Unlike standard small business loans, your company enjoys complete freedom with how you use the money from your unsecured business cash advance. Need to employ more staff? No problem. Require new tech and equipment or premises? No problem. You can use your unsecured business cash advance whichever way you see fit to assist your business to achieve its goals.
If you can't get a standard small business loan, but your business desperately requires a quick, hassle-free cash injection, don't despair. An unsecured business cash advance could be just what you need.
Shaun Thomas is an active entrepreneur and director of a number of limited companies who is happy to recommend Liberis as the funding partner for any UK small businesses.
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