SBA Paycheck Protection Program (PPP) loans offer much-needed relief in our current economic climate. However, PPP loans are intended for payroll support, as well as rent and utility expenses for businesses. Outside of the designated guidelines for PPP loans, businesses still need working capital solutions that can be arranged quickly and efficiently, without posing unnecessary risks to borrowers. Fortunately, there are a number of working capital solutions available to businesses to help them weather adverse conditions and achieve long-term success.
Merchant Cash Advances
For businesses that accept credit cards or businesses have shifted to e-commerce to make sales during the coronavirus pandemic, merchant cash advances (MCAs) offer a flexible source of working capital. MCAs are an injection of working capital structured around the sales history of a business. MCAs provide an advance in capital, and the balance is repaid electronically from a small percentage of the total credit card receipts from sales. A cash advance is not a loan, so businesses get to preserve credit ratings and avoid taking on unnecessary debt. Because payments are made from a small percentage of sales, rather than regular monthly installments, merchant cash advances offer a level of flexibility that business owners need right now.
Accounts receivable financing (AR financing) lets businesses leverage unpaid client invoices for capital. While businesses continue to make sales, they are still issuing invoices with staggered payment schedules of 30 days or longer. Staggered payment schedules are a standard business practice, but there are some companies that are still waiting on payments from clients prior to the first few COVID-19 cases that were diagnosed in the United States. AR financing is not structured around debt or your business credit ratings. Instead, AR financing converts unpaid receivables into cash which is made available within 24 hours after invoices are submitted. AR financing allows businesses to maintain a healthy cash flow to cover overhead, as well as expenses that fall outside of the designated use of PPP loans.
Unsecured Business Lines of Credit
New and small businesses often do not have the collateral necessary to secure traditional business loans, but they still need a source of working capital. Unsecured business lines of credit provide a reliable source of working capital without needing collateral to qualify. Unsecured business lines of credit have revolving and non-revolving options, and function very much like personal lines of credit. Credit lines provide a source of discretionary capital that new businesses, small businesses, and startups can use for anything they need.
Explore Your Options Today
Web Finance Direct offers a wide range of working capital solutions for businesses of all types. Our team will work with you to create a solution tailored to your needs and make the funds available quickly, so your business can maintain and grow operations. If your business needs working capital, and you don’t want to navigate a sea of red tape and high requirements trying to secure traditional loans, contact the professionals at Web Finance Direct today.