Lending is a tough business. Financing options come in different shapes and sizes, but where should you go if a bank declines your request for a loan? Unfortunately, this is becoming more common in places like the United States where banks are tightening their funding flexibility. How can you tackle your cash flow needs without the help of big named banks?
There are several ways to navigate being declined a loan for your business.
Revenue Based Funding
As the name implies, revenue-based funding causes your company’s loan repayments to adjust with your monthly revenue until you’ve repaid your loan. By paying a percentage of your monthly revenue, you can pay back your loan over the course of five years—or sooner if your business grows exponentially. In most cases, you don’t have to have much collateral or credit to secure revenue-based financing.
While high-interest debt isn’t attractive to anyone, it is an option if you’ve been denied a loan. If you can find a credit card that charges 0% interest for the first few months or even the first year, you can build your credit and pay off your debt quickly. The key here is to be proactive about paying them off since credit cards can come with high interest rates of 14% or greater.
Merchant Cash Advance
Another option that you may not have considered as of yet is Merchant Cash Advance. While not technically a loan, it does provide you with the cash flow you need to get your business off the ground. It is considered an advance and to pay it back you have to give up a percentage of your future receivables.
If you’re interested in Merchant Cash Advance business funding, Legend Advance Funding is here to help. We help a variety of businesses achieve their funding goals with MCA. Depending on your situation and needs, it could be right for you. Speak with a representative from Legend Advance Funding to learn more.