As an online business owner, you know that having access to capital is crucial for growing and expanding your business. However, securing financing can be challenging, especially if your global cash flow doesn't look good or you don't qualify for SBA loans. In this blog post, we will explore some working capital financing options for online businesses, including revenue-based business lines of credit, that are based on revenue and credit score, and alternative financing options.
Revenue-Based Business Lines of Credit
Revenue-based business lines of credit are an excellent option for businesses that need to access working capital quickly. The process of getting a revenue-based business line of credit is straightforward and can be completed within a few hours. The lender will review your last three months of bank statements and a one-page application. The lender will then run the application through their AI technology to determine if you qualify.
The good thing about revenue-based business lines of credit is that they are based on your revenue and credit score, which means that your global cash flow doesn't have to be perfect. However, the cost of revenue-based business lines of credit is usually higher than SBA financing, but it can be worth it if you need the money to grow your business.
Alternative Financing Options
Aside from revenue-based business lines of credit, there are other alternative financing options available to online businesses. These options include:
Factoring
Factoring is the process of selling your accounts receivables to a lender for a discount. This is a great option if you need cash quickly, but it's important to note that you won't receive the full value of your receivables.
Equipment Financing
If you need financing to purchase equipment for your online business, equipment financing is a great option. With this type of financing, you can borrow money to purchase equipment and pay it back over time with interest.
Merchant Cash Advances
A merchant cash advance is a type of financing that allows you to borrow money against your future credit card sales. This type of financing is convenient because it's based on your business's future revenue, and you can repay it through your credit card sales.
Consolidating with SBA Financing
While revenue-based business lines of credit and alternative financing options can provide the working capital you need to grow your business, the ultimate goal should be to consolidate your debt and secure SBA financing. SBA financing has lower interest rates and longer repayment terms, making it a more affordable and sustainable financing option in the long run.
In conclusion, as an online business owner, you have several financing options available to you. Revenue-based business lines of credit and alternative financing options can provide the working capital you need to grow your business, but it's important to consider consolidating with SBA financing in the long run. Take the time to explore your options and choose the financing option that works best for your business's unique needs.