As a business person, you will encounter situations when you are in dire need of cash to keep operations running or make a timely expansion in your business. You can solve the problem of running low on cash by considering a number of options. A key one would be to get a cash advance business loan. While this might be a reasonable short-term solution, you need to ensure that you are getting it right to avoid future problems.
I will take you through a couple of the vital factors that need to be borne in your mind while obtaining a cash advance business loan:
- Be fully aware of your business’s credit score
This is a factor that most of the traditional lenders will be keen on before awarding you a cash advance loan. It will be prudent for you to do a personal check on your credit score before approaching a potential lender. By knowing where you fall, the chances of you qualifying for a loan will be quite clear.
The best way to go about this is requested to get your credit score, by visiting AnnualCreditReport.com. Be on the lookout for errors in the computation of this score, especially payments to your earlier lenders which have been reported as late yet you settled them on time. Be prompt in seeking for correction from both the credit bureau as well as the lender in question.
- Assess all the options at your disposal
You can obtain a cash advance loan from various types of lenders. Knowing the available options will enable you to make an informed decision. There are traditional lenders; for instance the credit unions and banks. On the other hand, you could opt for the newer options such as OnDeck or even a merchant cash advance. The nontraditional options attract a higher interest rate on their loan, but the application process will be much quicker compared to the traditional lenders.
Banks and the traditional lenders have lengthy and much stricter rules with regards to this. In case, you have a high credit rating, say a credit score of more 700, you could consider the traditional options due to high chances of obtaining a cash advance loan at a low-interest rate.
- Be clear on the amount of cash that you need
It pays to have an exact amount of cash that you need and a practical plan on how you will use the loan. In the event that you are not certain on this, seek advice from an accountant or any other reliable adviser. You also have to avail all the necessary and relevant documents to facilitate a quicker and precise assessment of your business and its operations. Last but not least, a plan of how the cash will be used needs to be submitted to your lenders, you ought to have one before approaching any lender.
The three factors outlined in the article call for you as a business owner to be well-grounded on the process. Your choice of lender will be determined by your urgency and your credit rating but the nontraditional lenders will be less keen on the latter. All in all, ensure that you are getting the best and most sensible deal.