Even the best-prepared small business owner may be blindsided by an unexpected financial emergency. There are several financing options available to help you when you need immediate capital. Understanding the different emergency cash loans available will help you choose one that fits your situation and recover quickly from unpleasant cash flow surprises.
Here are some of the best loans for small businesses in an emergency. You can also benefit from financial management strategies when you are in need.
Business Bridge Loans
Business Bridge Loans are used to bridge the gap that exists between today’s urgent needs and payments due tomorrow. Bridge loans are short term funds that help you pay off outstanding invoices, or provide additional working capital if you cannot afford to divert other budget parts. Bridge loans can keep your business running during an emergency. Bridge loans are easier for small businesses to obtain, repay, and apply for than traditional long-term loans.
Business Tax Debt Loans
A business’s inability to pay tax can be affected by financial hardships that arise during an emergency. Late or partial payments of taxes can result in fines, and negatively affect your credit. Small business owners are faced with a dilemma: either pay the debt to avoid delinquency or risk an IRS federal tax lien.
Short-term loans for business tax debt may help you avoid the high interest rates that are charged by the IRS if you miss a deadline. These loans can help you avoid more serious consequences if your debt is not paid on time. They may include criminal prosecutions, large fines and even jail sentences. Tax issues shouldn’t put the future success of your company at risk. Business tax debt products can help you avoid these harsh consequences.
3. Daily Payment Loans
Daily payment financing is a useful tool for entrepreneurs who have to deal with obstacles quickly. It may seem strange to pay for a small-business loan every day. daily payments have many advantages over weekly or monthly payment options. Daily payment loans are ACH based and short-term. They’re also automatically transferred from a business’s account. Automated daily payments can be a better alternative than making a large payment towards the end of each month, when bills are piling up.
Daily payments offer more security, which can increase approval rates. Funds are also deposited faster into your account. Daily payment loans also allow new business owners establish a track record of credit. The lenders will then use this information to assess your creditworthiness.
Daily payment loans may be ideal for business owners in seasonal industries, such as the construction industry. It is easier to plan the future when you know exactly how much money you will be owing each day. Due to the 24-hour cycle, business owners are able to pay back their loans quickly and move on to the next project.
After an emergency, the window of opportunity quickly closes. Small business loans with daily payments are ideal for emergencies and help owners take advantage of opportunities.
4. Merchant Cash Advances
A merchant advance loan is a good option if you are in need of a large amount of cash within a short time frame. Merchant cash advances are an agreement between a business and a lender whereby the lender will give up a percentage of future sales or revenue in exchange for an upfront capital. Sales activity can be affected by an emergency. A merchant cash advance allows business owners the opportunity to get back up and running so that sales can resume. Merchant cash advance loans are perfect for businesses that operate in industries with seasonal downturns. Repayment is tied to the annual income. Business owners do not have to worry about deadlines for repayment in this situation. These small business loans can also be used by businesses whose customers pay frequently with credit cards or debit cards, like auto repair shops and healthcare facilities. The lump sum loan repayment is not based on revenue but on the percentage of daily transactions.
What Insurance Can Do for You
In the event of an urgent situation, insurance can help businesses avoid having to take out a short-term emergency loan. The forces of nature, from hurricanes to flooding, can cripple business owners. The Federal Emergency Management Agency (FEMA) and the Labor Department report that 40% of small businesses which close to repair after a disaster do not reopen. The failure rate increases to 65 percent one year after the natural disaster.
The business interruption insurance is an optional add-on that can be added to a standard property insurance policy. It protects businesses against income losses resulting from damage to or destruction of their insured property. The Insurance Information Institute states that business interruption insurance usually kicks in 48 hours after the policyholder signs up.
Consider professional liability or commercial property insurance as a way to reduce your risk. The former provides compensation for errors or mistakes made by employees or customers. Commercial property insurance protects assets of a business that are not covered by standard liability insurance.
Other Options Less Timely
There are many small business emergency loans available to help you when you’re in a cash-flow crisis and require a quick injection of working capital. You have several options like applying for an SBA emergency loan, peer funding or selling the equity you have built.
Be careful: SBA and bank loan processes were not designed for rapid turnaround. You need an emergency loan to meet your financial needs. These loans are subject to strict criteria, long approval periods, and it could take you weeks before you receive your funds. When money is tight and time even more so, every second counts.
QuickBridge Business Finance for an emergency
Alternative business lenders are often sought by small business owners in need of emergency loans. When you need quick cash, banks can be difficult to deal with. Alternative lenders can provide you with working capital quickly and easily so that you can grow and sustain your business.
QuickBridge provides financing for businesses in a tight spot. We offer small business loans that are simple to apply for and we make decisions quickly. There are no hidden terms or fees. If approved, funds could be available within 24 hours.
QuickBridge is the perfect solution for businesses that are faced with an unexpected emergency.
