How can I secure cash fast?

Published by MFAA

Small business owners know all too well that the unpredictable nature of the industry can sometimes mean that quick access to cash flow is needed. Here are some of the financing solutions available to you:

Equipment finance

For many small businesses, especially those in the hospitality industry, income and cash flow are heavily reliant on functioning equipment. So for restaurant owners who find their delivery truck has suddenly decided to call it quits, turning to equipment finance could be the best solution.

Equipment finance loans can be used to purchased new equipment or update assets. Large scale capital items, like vehicles, machinery or commercial kitchen appliances are examples of equipment that can be financed through and equipment finance loan. 

Unsecured business cash loan

An unsecured business cash loan doesn’t require you to use a business or personal asset as security.  

Unsecured business cash loans have strict guidelines and approval is based on how long your business has existed, how long you’ve been at your current address, and on monthly sales, so it's not suitable for start-ups. 

Equity release

If you have an existing property, you can cash in on the equity of this premises to secure additional funds. With planning and an understanding of overall objectives, this could be a good solution as interest rates can be lower than for commercial loans.

An equity release gives you certainty, however, the risk is that your property is on the line, so there are important things that must be considered – the business plan, the equity available and an alternative plan if your business can no longer service the facility.

Payday loan

For any business owner, especially freelancers, who need to cover everyday costs and expenses but are still waiting for a cheque to clear, taking out a payday loan may seem the ideal solution. They are easy to establish, with approval generally settled within 24 hours, are available in small amounts, and even those with bad credit histories can apply.

However, only consider this as an emergency or last-minute short-term solution. Payday rates are high, usually around 20% of the principal loan amount, and it’s vital that a business has good cash flow projections to ensure they can meet the repayments.

Merchant cash advance

A fast transaction that’s designed to match your cash flow, a merchant cash advance is where a lender essentially purchases future transactions of the business and provides a lump sum payment in exchange for a percentage of future sales.

A merchant cash advance should only be considered as a short-term solution as they are more expensive than traditional loans. 

If you find yourself in a situation where your business would benefit from quick access to cash flow, it is always recommended you speak with a broker before selecting which option to go with. They can advise you on the best route to take to ensure your business will not experience a cash-shortage predicament again. Contact an MFAA Accredited finance broker today.