When you become a businessperson, you become responsible for a whole host of obligations. You need to ensure you have sufficient working capital on hand for day to day operations, sufficient amount and variety of inventory to offer to customers, enough money to pay employees wages, pay suppliers and pay your rent or mortgage. You also need to cater to your own personal and family needs. It is fairly common for you to occasionally experience a shortfall in cash and be in need of some credit to fill the gap. When this happens you have to look at your options.
Among the most popular solutions for short term credit is using credit cards. In this way you can spend cash you do not currently have and try to ensure you settle the debt before the due date and incur charges. This borrowing can be fairly risky as the period to repay the money taken off the card can be really short. Another solution is to borrow a small business loan. Unfortunately while this option is good for the low cost of borrowing and the lengthier period, it does take a while to access. If the need is urgent, applying for a business loan can be a bad idea as it can take several months for the credit to be accessible.
Another option is small business cash advance. This is borrowing against your future earnings. This option’s main disadvantage is the cost. The rate is often several times that of a business loan. On the upside however, they are very quickly processed. As long as your business accepts credit card purchases you can commit a percentage of these receipts for a certain period to cover the repayment of this borrowing. You do not need to provide collateral and you can often have the cash at your disposal within seven working days.