The start of a business varies with each individual or entity but many small companies have one thing in common; starting as a home-based business. This is the level where many companies are tested and may need just a little assistance. One of the major challenges business owners at this stage face is finding a small business loan for their business. We at Merchant Funding Solutions understand those growing pains all too well. We’ve helped countless business owners through these initial stages and are eager to put our experience at your disposal.
The Best Options to Get a Loan for a Home-Based Business
1. SBA Microloan
Home-based business owners have access to a financing program that is offered by The US Small Business Administration called the “SBA Microloan Program”. This program provides small business loans usually up to $50K. These loans allow business owners to start, manage, and grow a small business. The requirements for these programs vary from state to state. For more information see https://www.sba.gov/.
2. Small Business Invoice Factoring
Home-based businesses that sell a product or service to a larger client usually have to wait 30 to 60 days to get paid. Hence, many business owners then face the problem of not being able to pay their business expenses such as an employee’s salary. The way some business owners choose to overcome this is with a small business factoring program. This works to stabilize cash flow by financing slow-paying invoices from any reliable commercial clients. The business gets the money it needs instantly while the factoring company waits until the invoice is paid. The approval rates do vary with each business and may increase as the business grows.
3. Purchase Order Financing
Product sellers and wholesalers that start as home-based businesses sometimes need help with product cost. Clients that make large orders can create the pressure of needing more inventory to fill oversized orders. As a seller, you need to figure out how you can fulfill these orders on time. That is where purchase order financing can be of assistance.
Lenders will pay the business’s manufacturing suppliers if they don’t have enough capital to purchase the materials themselves. These loans make fulfilling large orders easier and ensuring they are on time.
4. Home Equity Loan
As a home-based business, there’s a good chance that you currently own your home. If you do, another alternative loan to look at is a home equity business loan. Any equity in your home will finance your business as a line of credit.
Banks assess the value of your home which determines the amount of money they’re willing to approve you for. There are great benefits to this such as only taking the money when you need it and paying it back so it serves as a revolving line of credit. However, there are some things to keep in mind when considering this option. If you take the money but don’t pay it back your house will usually serve as collateral and the bank can then repossess your home. We urge you to speak with a financial advisor regarding this option.
5. Business Credit Cards
Many business owners use their personal credit cards for business expenses. The problem with this is that it carries risk if you fail to pay these credit cards back. You can ruin your personal credit and still be held liable.
Business credit cards however can be a reliable source of capital. Not only do they help by having access to more money they also help build a business’s credit history. Business credit cards are a great alternative to business financing so long as you have a great credit score.
6. Small Business Financing
Traditional bank loans are great for business but are hard to come by. A great alternative to overcoming this hurdle is to get a business cash advance. There are multiple programs to choose from and we want you to have all the options available.
Here at Merchant Funding Solutions, we pride ourselves on helping business owners get the best deals possible. We provide cash advance financing with both short and long-term options. We provide many programs that are specific to your business needs.
Programs we offer:
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Short Term Financing – Depending on your preference if you would like to pay off early we suggest our short term options.
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Long Term Financing – Extending your financing options can stretch out your lending time allowing for a lower payment.
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Equipment Financing – From vehicles to restaurant equipment to auto repair equipment we can help you get the equipment you need to move your business forward.
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Credit Card Processing Loans – The sale of a merchant’s credit card processing transactions or deposits for upfront financing is known as a credit card split. This program is different since your credit card statements will be part of the approval process. In addition, this is a good alternative when you receive most of your transactions by credit card. Meaning that most credit card processing loans use a percentage of your daily credit card sales to determine your daily repayment amount. This can be a great program for seasonal businesses.
