≡ Menu

Grow Your Business: 6 Best Ways To Get Working Capital Finance For Small Businesses

Did you know that 29 percent of all failed startups and small businesses did so because they ran out of cash? In fact, that’s the 2nd most common reason for startup and small business failure. 

If you’re currently struggling with the same problem, don’t worry. There are multiple working capital finance options that you can take advantage of. Whether you need cash for payroll, cash flow, supply or covering production output, there are ways to get the necessary loans.

Of course, they all have their terms and conditions. But, most, if not all, of them are favorable and accommodating. That said, let’s help you find the best financing options that are available to you today.

Short Term Loans 

This is the ideal loan for a small business that needs cash immediately. It’s usually a lump sum loan that you ought to pay back within a year and a half.

These are provided by several lending institutions which offer a $250,000 loan limit. So, if you qualify, you can get everything between $1,000 and $250,000.

Short term loans are not only great for that working capital finance that you need, but they can be disbursed fairly quickly too. Depending on the provider, the loans can be disbursed within 24 hours, thanks to minimal requirements and even the acceptance of bad credit.  

While this is great, it is important to note that the interest rates are usually higher than that of the longer term loans -at least 10 percent. They also require weekly payments, which can be hard for small businesses to do. 

Family and Friends

This is about the best source of working capital finance. If your family and friends can afford it, you should reach out to them for a loan.

Although, this may be a little hard though considering that over 50 percent of Americans have less than $1,000 saved. However, you should ask still because their repayment terms will definitely not be as strict as those of lending organizations. 

Fast Online Loans

There quite a few fast lenders online. Examples include Paypal Working Capital and Moula. They’re taking advantage of the rapidly growing fintech sector, and lending money to businesses that need it.

Every one of them has its terms and conditions, and some of them can be pretty stringent. But, they’re not as rigorous as that of other loans like SBA and other longer-term loans.

Also, while many may limit their working capital finance loans to $100k, there are few that will give out $250k. 

Business Credit Cards

This source of working capital funding is often overlooked. Yet, it’s a great way for a small business to get that new lease of life.

Most business owners don’t even know how much credit they can access because they never ask. They’re the easiest, most accessible way to get that capital. 

This is a great option for borrowers who aren’t looking for a lot of money or physical cash. You can just use the credit to fund key business processes. Unlike personal credit cards, the limits on these ones are higher.

Extra Working Capital Finance Options

These include invoice financing, crowdfunding, and peer to peer lending. These are effective working capital finance options too. If you need more tips on getting small business loans as well as other small business tools, visit the At Your Business Blog.