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Working money or working capital are the funds used for handling everyday costs and expenses every business has. Having enough capital available is essential for running all of your daily tasks. However, it’s essential to invest this money in growing your business further instead of keeping it in the deposit box.
The proper working capital management is the equation made out of two segments. One of which is understanding how working capital equation works and another one is cutting down the expenses that you can afford to cut.
On the other hand, some companies consider working capital loans to be the only way to consistently maintain cash flow. But, who’ll lend money to a company, and under what conditions? Capital lending businesses, like Scottish Pacific Business Finance, exist to help other companies by lending them specific amounts of money to further grow their companies.
The so-called capital helps any business from falling by lending them the money they need to maintain their working capital at bay or to expand their business further.
Some lenders are worth mentioning more than others for various reasons, and here are the ones that stand out the most:
1. OnDeck Capital Lender for Small Businesses
OnDeck capital provider is known as the best choice for small businesses, including retail stores that need to cover up the costs created during the seasonal sales fluctuations. This capital provider offers up to USD$500,000 for maintaining the cash flow consistency in your business. OnDeck is also offering short- and medium-term loans and lines of credit for any business that qualifies to borrow the money.
There are several things small businesses should consider before taking a loan. Although a loan from OnDeck is much more expensive than the local bank offers, capital lenders usually have less strict requirements that businesses need to fulfill to get the loan.
Additionally, their rates are very competitive compared to other capital provides. Lastly, the time needed to fund the money is much faster than it is from your local bank.
Businesses can choose from several lending packages that OnDeck offers. The short-term loans are up to USD$500,000, which is an excellent choice if your project has a fast return on investment.
These short-term loans need to be repaid anywhere between three to 12 months. Choosing this specific loan package enables you to fund a marketing campaign, cover unexpected seasonal expenses, or even update your business location.
In case you’re looking to expand your business and purchase new inventory and equipment, you might consider a long-term loan. The long-term loan package includes up to half a million US dollars that can be repaid between 15 and 36 months. The interest rates for OnDeck loans begin at an effective APR of 11%.
It’s worth mentioning that OnDeck has meager requirements that borrowers need to fulfill to get them any kind of financial loan. This provider offers loans even to borrowers with incredibly low credit scores of 600.
The entire process is concise, easy, and fast. You can get the loan in a matter of several days upon filling out their web application.
2. LoanBuilder, a PayPal’s Loan Service for Small Businesses
PayPal owns a loan service known as LoanBuilder that offers small business money loans from USD$5,000 to USD$500,000 for any business purpose you think of.
Moreover, the LoanBuilder configuration software allows you to adjust the repayment period to suits your business needs. Businesses can repay their loans anywhere from 3 up to 12 months.
One of the most exciting facts about LoanBuilder is that there are no confusing interest rates and percentage fees that can build up to a more substantial sum than previously accounted for.
LoanBuilder simply offers a one flat rate fee without any hidden costs. The one downside of their offer is that the fee must be repaid in full even if you repay your loan earlier.
LoanBuilder Application Process
This capital lender works incredibly fast–upon filling the application, the money you requested will be available on your account the very next business day. Of course, all of this is valid in case you qualify for a loan. However, their loan requirements aren’t as harsh as some others.
All you need is to be in business for at least nine months, have the annual revenue of at least USD$42,000, and have a personal credit score of at least 550.
Even though most industries qualify for LoanBuilder loans, there are some exceptions worth mentioning, like non-profit organizations, religious organizations, and any business specializing in financial services.
3. SmartBiz Capital Loans for Large Businesses
SmartBiz capital loans provide borrowers with low-cost, flexible SBA loans. What it takes is to fill out an online application form, which is easy and straightforward. In case your business requires working capital, you can apply at SmartBiz a loan for up to USD$350,000.
You can use these funds in various ways, like hiring more employees, purchasing new equipment, expanding your business, and even refinancing old business debts. SmartBiz rates are incredibly competitive, too.
The prime rates go from 2.75% to 3.75%. The loan repayment period stretches up to 10 years.
Businesses that have solid credit scores can qualify for an SBA loan at SmartBiz. Some of the requirements include a minimum of two years in the business, a sufficient cash flow, and a personal credit score of at least 650. In case your business had foreclosure or bankruptcy in the last three years, you can still apply for the loan.
SmartBiz Capital Loans Requirements
If you’ve applied for government working capital loans or don’t have outstanding tax liens, you may not be eligible for the loan at SmartBiz.
There’s more to SmartBiz than it meets the eye. Other than offering substantial working capital loans, the company also offers loans for commercial real estate investments up to USD$5 million with a repayment plan of up to 25 years. Additionally, SmartBiz offers bank term loans with a repayment plan starting with two up to five years with interest rates of 6.99%. These loans go up to USD$250,000.
4. BlueVine Capital Loans for Companies with Unpaid Invoices
The BlueVine capital provider offers up to USD$5 million to cover for your business’ unpaid invoices through its incredible invoice factoring services.
Borrowers can expect up to 90% of their unpaid invoice amount to arrive in the first 24 hours. The rates begin at 0.25% of the invoice value per week.
How to Qualify for BlueVine Loans?
To qualify for BlueVine’s invoice factoring services, your business must operate through a B2G or B2B and have all the qualifying invoices available. Your credit score must be at least 530 is also a must. Additionally, being in business for the past three months and having the annual revenue of at least USD$100,000 are some qualifications that the borrowers must possess.
In case you’re not looking for an advance to cover for your unpaid invoices, you can also apply for a term loan up to USD$250,000. The loan will be repaid through weekly payments at a fixed price, starting from six to 12 months.
Paying off your balance makes the funds available again, making BlueVine’s offer a much more flexible one than from the others. However, it’s worth mentioning that the minimum requirements are the same as those for the term loan.
5. Working Capital Loans from American Express
Being an American Express business cardholder never made it easier to pay off the debts to your vendors as it is today. By being an American Express cardholder, you automatically qualify for Amex’s working capital loan, and you might receive up to USD$750,000 even without going through your credit score.
The main benefit of Amex’s working capital program is that it uses the existing data about your business to determine whether you qualify for the loan. In case you qualify for the loan, you can get anywhere from USD$1,000 up to USD$750,000 to pay off your vendors.
When approved, Amex will pay off the vendors immediately, and you’ll be able to repay the loan in installments from one up to three months.
A fixed-rate of 0.6%-5.25% on the base loan depends on the length of the repayment period you chose. It’s worth mentioning that there are no repayment penalties whatsoever. However, the downside is that even if you pay off your loan prematurely, you’ll need to pay the full interest rates.
That’s a perfect way to pay off the debts you have toward your vendors and start over with a clean slate. Considering that the repayment plan is rather short, you might want to think twice before applying for this kind of loan. Do your maths and see if you can go through with it.
Whether you own a small business that’s having a hard time making ends meet or have a large business stuck with unpaid invoices and vendors, there’s a solution. Capital lending companies can help you resolve all your financial issues fast and clean.
However, be sure if you qualify to become a borrower and assess if you’re ready to pay the pre-set interest rates. With careful planning, it’s possible, and it’ll help your company get back on its feet in no time.