If money is tight, cash flow loans for small business could be a great way to keep going until business picks up. Here’s a familiar problem for small businesses. The basics of your business model are sound, unfortunately for one reason or another you need a short-term cash injection. It may be because business is slow this month or because your clients are late paying their invoices. Either way, you need money to ensure you can meet your payment obligations. This is where if you are a small business a short-term cash flow loans can be a life saver.
Small Business Cash Flow Loans
Cash and cash flow is the lifeblood of any business. If you reach a point where you don’t have enough of it to meet your payment obligations, you can find yourself in severe problems. Indeed, many of the small businesses which do cease operations over the next 12 months will do so despite being in a basically sound financial position.
Cash flow loans could be the answer. This a short-term lending option for small businesses and can typically last from between 30 days and 180 days. This is a good option if you only need a small amount of money and are certain you will be able to make repayments within the time period.
This can be a useful alternative to conventional business loans. Some lenders may not be willing to work with small business or lend small amounts over the short-term. Banks and financial institutions are, in general, becoming more risk-adverse which makes it more difficult for small businesses to access capital.
The problem is even greater if you have a poor credit rating. If you’ve missed payments in the past or have a limited payment track record many business lenders may simply refuse to work with you.
Why you might need Cash Flow Loans
There are many reasons why you might need a short-term cash injection, even if your business is basically in a healthy position including:
- Late payment of invoices: Business is good, but one or more of your clients are being slow to pay. This can be an enormous problem for businesses. If you find yourself unable to make crucial payments, such as PAYE or tax obligations you could be in trouble despite business being good.
- Seasonal business: Some businesses may be seasonal in nature. For example, if business is slow during the Christmas period you may need a cash injection to keep you going until things pick up.
- You want to invest: A business is a lot like a shark – it needs to keep moving forward or it dies. You may be in a position where you need to invest in order to keep pace with your competitors. A cash flow loan may be an affordable way to boost your finances in the short-term to make that investment.
Choosing the right Cash Advance Loan
Whatever your reasons, you will need to choose the right cash advance loan provider for your requirements. This starts with making certain you qualify.
Like all lenders cash flow loans providers will assess your application on the basis of your credit history. Compared to conventional business loans, they are more likely to be willing to work with you if you have a poor credit history, but this will vary from lender to lender. You may be able to make a quick enquiry on their website to find out if you will qualify. Some will give you a decision within a few minutes, while others will make you wait a few days.
The amount you can borrow will differ from lender to lender. Assuming you do qualify the amount could range from a few thousand pounds to several hundred thousand pounds. Interest rates will vary. In general, the better your credit score the lower your interest payments, although cash flow loans are available for a wider range of finance profiles than other types of credit.
In general, this type of cash advance loan is better for more established businesses rather than start-ups. As well as checking your credit history, they will look at the performance of your business. As such, a start-up with relatively little trading history may have to find alternative forms of finance.
This option, then, will not be ideal for every business. You should make sure you understand all the costs involved and how repayments will be restructured. As with any short-term personal loan it’s vital you are certain you can pay on time. If you can’t, the costs may mount up. That said, in a world in which cash flow problems are common, this could be a saviour for your business.
Cash Flow Finance solution: Business Cash Advance
PDQ Funding offer cash flow finance solutions with our Business Cash Advance. The cash advance product is an Alternative Business Funding Solution which has been designed with small businesses in mind. We understand that a businesses cashflow can be up and down with seasons or buying habits. Cashflow finance repayments reflect your businesses cash flow so you only repay when your customers pay you. Business Cash Advance is designed to match irregular rising and falling in the business cash flow. This cash flow finance product supports business owners in those times of year. We approve over 80% of applications due to the speed and technology of our software integrations with your merchant account.
When the amount you have requested has been received the Business Cash Advance UK repayments are automatically deducted. A small agreed percentage of about 7-10% per transaction is held back from your card takings. The cash flow is never affected as the payment amount is the same on every card payment you take. If you have a productive and busy month, you will pay back faster. Should the month be going slow and not as productive, maybe due to a bank holiday, the amount is paid back slower.
If your business has traded for at least 6 months and takes an average of £5.000 in card payments each month. This means you are eligible for a Business Cash Advance .
To apply simply complete the online enquiry and we will do the rest!