Business Financing Options Beyond The CARES Act

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Business Financing

• Options Beyond The CARES Act

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While the COVID-19 crisis is still ongoing, small
businesses are facing unprecedented financial
challenges. Lockdown is in place causing a lot of
businesses to shut down and layoff their
employees. The health emergency crisis is
agitating the economy, pushing the healthcare
industry to their limits, and significantly
affecting American lives. The consumer behavior
during the coronavirus outbreak has changed
drastically causing businesses to cut their
expenses, laying employees off, and using every
means necessary to cope with the crisis.
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The Congress recently passed the Coronavirus
Stimulus package, and Economic Security Act
(CARES Act) to help struggling businesses stay
afloat. In addition to these relief funds and
grants, the CARES Act also created the Paycheck
Protection Program (PPP) loans to help eligible
businesses with forgivable loans up to 10
million. For small businesses, these relief
programs might not be enough to keep them afloat
until the crisis is over. To help small
businesses with more financial options, weve
rounded up a few additional business financing
options to help them access capital quickly
beyond the SBA relief programs.
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Financing Options beyond the Coronavirus Relief
Bill
Because of the generic nature of the CARES Act,
small businesses can leverage the relief programs
along with support from lenders and private
creditors. Many private and nonprofit
organizations are providing financial assistance
to small businesses to help them afloat during
the COVID-19 crisis. If youre an affected
business with inadequate cash to support your
business, consider negotiating with your lenders
and suppliers while the COVID-19 crisis is still
ongoing. Online lenders like Merchant Advisor is
a great option to apply for a business loan
during the coronavirus pandemic. You simply fill
out a loan application, and we help you with a
variety of business financing products based on
your unique needs and requirements. Our loan
specialist will work with you to help you saves
time and get the best loan possible for your
business. Here are some of the most popular loan
options beyond those provided by the federal
government during the coronavirus crisis.
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Short Term Business Loans
If youve successfully started your business with
little debt obligations, taking out a loan might
not be your first choice. There might be a
situation when you encountered business
seasonality, have a special growth opportunity or
simply need to update your equipment or add more
inventory to keep operational. When your small
business is struggling with cash flow, short-term
business loans can help fill the gap.
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Short-term loans are for a shorter period
typically from one to three years with loan
amounts ranging from 2,500 to 250,000 with an
interest rate as low as 8.The best thing about
short-term business loans is quick approval
sometimes in under 24 hours. In addition, you
have the flexibility to use the cash for any
business purpose. Whereas PPP loans have strict
requirements on how a business should use the
money and typically takes 10 days to be disbursed
after the loan is approved. Therefore, when you
need quick funding for expenses that arent part
of your payroll, a short-term loan makes more
sense for your small business.
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Business Lines of Credit
A business line of credit is a great financial
option to help you get access to flexible cash
when you need capital fast. It works similar to a
credit card, where you get access to a credit
limit from which you can draw cash as and when
required. You dont have to use the line of
credit all at once, leaving you with extra cash
when you need it.
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The best thing about a business line of credit is
that you dont pay interest on the total credit
limit. Youll only pay interest on the credit
amount you use, and after you repay the owed
amount, the line of credit goes back up to the
original amount. With business lines of credit,
you can get cash up to 100,000 for terms up to
24 months with weekly or monthly payment
frequency.
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With equipment financing, you can finance any
needed vehicles, furniture, machinery, and much
more. The best thing about equipment financing is
that the equipment itself serves as collateral
for the loan means when you default on the loan,
the lender seizes the equipment and sell it to
recoup the loss. This also helps in securing
flexible loan terms and lower interest
rates. With equipment financing, you can get cash
up to 250,000 at one to five years terms without
any down payment requirement.
Equipment Financing
Sometimes you might need to upgrade or replace
your business equipment to stay competitive or
even just to stay operational.
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Business Credit Cards
Getting a business credit card is another quick
flexible solution to help you get access to
capital fast. With business credit cards, you can
make small purchases to keep your business
operational open (like paying for to-go
containers for your restaurant). Qualifying
for small business credit cards is easy, even
with a bad credit score. All you need is to sign
a personal guarantee to open a credit card
account. Business credit cards are a great way to
finance your small business when you have a good
personal credit score with poor business
credit. If you can manage the account well, a
secured business credit card can help build your
better business credit for the future. When
applying for credit cards, make sure to look for
those business credit cards that provide
low-interest rates or a 0 introductory APR. With
such credit cards, you only make minimum monthly
payments during the crisis and repay the debt
when the business gets to usual.
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Merchant Cash Advance

• Merchant cash advances are another quick funding
  option where your business receives a lump sum of
  upfront cash in exchange for a fixed percentage
  of your future credit and debit card sales. Its
  not a loan, but an advance on your future
  receivables. There are no fixed monthly payments
  and youll pay when your business makes money.
• This is the most convenient funding option
  especially for seasonal businesses where payments
  are tied to your sales. You pay more when you
  make more sales and vice versa.
• With merchant cash advances, you can get cash up
  to 500,000 with no fixed monthly payments,
  upfront costs or hidden fees and cash within 24
  hours. A merchant cash advance is an expensive
  funding option and should be considered as a last
  resort.

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The Bottom Line
With the coronavirus crisis in full swing, small
businesses should look into the federal grants
relief programs, but when you need quick funding
and support than you can get from coronavirus
relief programs, just know there are financing
options available. From short-term loans to
business lines of credit and equipment financing,
you can have the financial resources to support
your business operations, care for employees, and
keep you intact through the crisis.