What Is a Cash Flow Loan? Cash Flow Financing Explained.
A business cash flow loan is a type of borrowing used for a small business’s day-to-day operational cash needs. Business owners use business cash flow loans for various things, including debt financing, stabilizing business bank account balances, covering items like bills and business expenses, making payments for inventory during the busy season, financing projects and payroll, making rent, and other everyday needs. Lenders offer these working capital loans so that business owners can get the cash they require for a wide range of operational costs and provide financial protection.
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What Are the Best Cash Flow Businesses?
Consistent revenue month over month is critical in the eyes of lenders. A small business with consistent sales and deposits is usually deemed to have the best cash flow. Some great examples include restaurants, auto service centers, food markets, and medical practices. However, even these businesses can be cash-strapped at times and might need additional money. Small businesses of all types often require access to cash flow lending at some point or another.
6 Best Business Cash Flow Loans: What Are My Options?
Business Line of Credit
Great option to have in place as you can draw money on demand as its a revolving credit line. Flexible and fast, its a top choice for business owners.
Small Business Loans
When you need money fast, a short term loan may be the answer. Term loans have a fixed loan amount, over a fixed term, with a fixed payment which offers predictability in repayment.
Merchant Cash Advances
Merchant cash advance provides lump sum funding when other products say no. This product offers higher approval rates because repayment is based on future expected future sales. In some cases, debit card sales are not counted. Great for owners with a lower credit score or low average daily balances. No personal guarantee , only a business performance guarantee.
Business Cash Advance
A good busines option when owners can't get a traditional bank loan. Repayment based on future cash flow. A set percentage of future revenue is used for payment. Quick application process.
For those businesses that invoice customers on a regular basis, invoice financing may be the solution for you. Invoice financing option that allows you to receive payment on invoices before client pays. Credit history of business owner is not considered.
Business Credit Card
Credit cards are actually the most popular option for business owners as the flexibility and quick access for purchases is unmatched. Loan payments are affordable as well.
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Cash Flow Lenders: Who Should I Work With ?
When choosing who to work with you should evaluate if that traditional banks or other originators not only are reputable but also do they have the right products to offer you to solve your incoming cash flows. How do lenders evaluate your application? Business cash flow loans vary in interest rates, origination fee, additional fees (total cost), personal guarantees, unsecured loans, company's assets (asset based lending), not to mention qualifications such as credit scores, company assets, personal assets and other criteria.
Frequently Asked Questions
Advice, Tips, and Warnings About Cash Flow Loans
Like any business finance product, you must still ask yourself why you need a cash flow loan to fix your company’s issues. Is your cash flow problems short term? Do you need debt financing? Was this a one-time, extenuating circumstance or emergency, or will your cash flow problems continue long term? Is asset based lending an option for you? Will your company always require a credit facility as it’s just the nature of your industry?
Consider the questions above when choosing the cash flow loan solution because the answers to those questions are not the same loan product to solve your cash flow concerns. Not all online lenders are the same. Work with a cash flow lender with an extensive product line that can offer you as many choices as possible. When looking over cash flow loans, there’s always a solution that will work. As we always say at AdvancePoint Capital: Compare and shop around, and you will always save!
How to Apply for Cash Flow Loans?
AdvancePoint Capital can assist many small business owners in finding the cash flow loans they need. We offer an easy loan experience that our customers love. Our process is fast and streamlined, with high approval rates depending on how much money you need.
Applying for a loan with AdvancePoint Capital is a simple four-step process. Start with this online lender form, fill out the short application page, wait a few hours for your approval, and get your cash! We can help you get on the road to solid cash flow right away.