These days’ traditional bank loans can be difficult to obtain and the process of applying for them can in many cases be frustrating and overly complicated.
The first problem is that often a business will need to present a business case or a business plan for the bank to recognise the small business and its intentions with the loan. You may need to attend several meetings and this can be a stressful and worrying process to go through.
There is also a lot of paperwork to fill in, with various credit checks and references as well. For a small business, this can be daunting and off-putting. Business confidence in lending is at an all time low, and despite banks claiming they are lending to small businesses, many business owners still feel let down and unsupported by the banks.
Not only this, but after you have applied for the bank loan you may need to wait some time for a decision to be made (and even longer for the loan to transfer into your business account). The waiting around can sometimes be frustrating, especially as you would like to get on with your business and make the changes needed – but without the finance you need you’re stuck in “limbo.” This situation is especially frustrating if the cash is needed for a working capital loan that the business needs quickly.
Bank loans can also be inflexible, asking for strict monthly repayments that some business owners simply cannot afford. If you miss a repayment date, you may also be liable for the debt personally as a business owner. This secured kind of loan is something that many business owners would want to avoid but in some cases feel that they have no alternative.
However, there is an alternative to this traditional method of borrowing money for your business. In fact, there are several ways that you could get quick business loans without having to ask the bank and go through the process described above.
One business loan alternative is the merchant cash advance. This merchant advance allows you to repay your loan through a fixed percentage of your credit and debit card transactions, so you no longer need to worry about strict repayment terms and late charges on a monthly basis. You can be advanced anything up to £500,000 to spend and invest in your business as you wish. This might go towards a bulk order of stock, a company vehicle, a new website or a change in office location. You may even be able to top up this advance if you meet the full repayment terms in the future, making this an affordable, flexible and innovative way of lending.
Written by United Kapital Managing Director Tony Pegg