A small business might never know when the need for cash or extra capital could emerge. Under such circumstances, an entrepreneur might find applying to a bank as cumbersome and would want a better and cheaper alternative.
Here are some of those alternatives listed that could help a business just in time.
- Square Capital – If a business is into offline or online retailing, then seeking funds from Square Capital could be the best option available. The lender offers funds up to $50,000, but a business needs to have a Square history to be eligible for the loan. Further, the lender offers loans on invite only. Therefore, an owner should have a valid email received from Square to proceed. The lender has simple repayment terms as it will charge a specified percentage of daily card sales. Square Capital’s APR of 35% is cheaper than other lenders.
- Working Capital Through PayPal– A business using PayPal can easily get an affordable loan given the unique model considered by the lender for disbursing loans. PayPal evaluates business sales history and offers loans up to 15% of the total annual sales through PayPal. The repayment is a fixed percentage of daily sales. Since the loan amount could be limited, the loan option is apt for meeting small business expenses quickly.
- Equipment Leasing – If a business needs to buy equipment for running its operations then it has two alternatives to choose from. Firstly to go ahead and buy the equipment or acquire it through leasing. The second alternative can effectively help a business to acquire equipment without having the need to raise substantial capital. Leasing can be of three types, i.e., fair market value, $1 buyout and 10 percent option lease. Under leasing, the equipment is kept as collateral. Therefore, it is a far more affordable option than other types of lending, which does not include collateral. Moreover, a business pays less if it chooses not to purchase the equipment later at the end of the lease period.