Running a business is hard work. While business ownership is the American Dream, keeping a business funded—especially during times of unanticipated loss or surprise expenses—can sink a company or small business. Once funds are limited, entrepreneurs sometimes have to make tough decisions and cutbacks that can affect future longevity. When funds become tight and traditional lenders close their doors, many business owners are surprised to learn that non-traditional lending services may be just the thing a business needs to stay afloat and ride out a storm. At RJ Funding Services (also known as Rafter J Funding Services), we offer just that: non-traditional lending options for small business owners in diverse industries. Following are three little-known ways you can get the capital you need to invest back into your business.
Merchant Cash Advances
Merchant Cash Advances (MCAs) are an easy way to gain access to additional capital when money is tight. Some business owners prefer this method of lending for unanticipated expenses. For instance, let’s say you run a restaurant and kitchen equipment, that is vital to your everyday operations, breaks down and needs immediate replacement. In this hypothetical situation, you may not have the savings or funds to purchase equipment right away but you can’t risk closing shop for a week (or longer). This is where an MCA can be especially beneficial. A Merchant Cash Advance is simply a way to access funding by selling your future receivables to your lender. By leveraging future payments from customers, you could access to funding in as little as 24 hours.
Traditional lending is determined by a number of factors such as credit scores and savings accounts that may seem outdated in today’s fast-paced economic climate. A bank or lender establishes a line of credit where monies are given in a lump sum and paid off on monthly basis with interest.Asset-based lending is different. This type of lending involves a business owner leveraging assets like equipment, property, and inventory for a revolving line of credit. With this type of loan, credit is based on the value of your company’s assets.
Private Money (“Bridge” Loans)
Certain types of business like real estate firms encounter great difficulty with gaining access to funds from traditional lenders. Those investing in foreclosures or those rehabilitating homes often benefit from receiving private money instead of rigid, traditional lending. This form of lending is often referred to as a “bridge” loan. Essentially, bridge loans are short-term (normally two years or less) and the amount is determined by equity invested into a property.
At RJ Funding Services, we offer many alternatives to traditional lending for business owners in all kinds of industries—including auto sales, real estate, and the retail and hospitality markets. We are accredited by the Better Business Bureau. To learn more about your funding options, call (844) 845-6579to speak with a knowledgeable member of our team.