You must have noted that a good number of high risk micro-business loan options you’ll find in the market are rather costly. And that’s true.
All the more, those are the most favorable terms you’re likely to get for high-risk micro-business loans. So it’s smarter to take credit in the form of high-risk loans if that’s the only choice you have and you can’t wait.
Nevertheless, there are several more reasonable funding options for small entities to consider further than high risk business loans. But their ease of access depends on a few qualifications. However if you have some collateral to present, good credit, or you’re a startup, then you may have one or two other options.
Here’s how to make a start:
Put Forward Some Collateral
If you and your company’s 3 major qualifications don’t pass the underwriter’s test, then offer up some sort of collateral if the loan is asset-based rather than rushing for high risk loans.
Invoice financing along with equipment financing are two important self-collateralizing financing options that aren’t classified as high-risk because they’re protected by certain assets.
For example, equipment financing offers loan up to 100 percent of the price of specific equipment needed by a business, and the equipment itself is used as the collateral. You can enjoy this with a 600+ credit score (personal), 11 or more months of operation, and over $100,000 in revenue per year.
Invoice financing however uses unpaid invoices as collateral and thus qualify as low risk. With this funding method, you can get an advance to the tune of 90% of your outstanding invoices’ value. Also, you only need 6 or more months in operation and as little as $50,000+ in revenue per year.
Explore Your Credit Card Options
Another way to get short-term credit without breaking the bank is to looking into what options you have on your credit card. Most times when you think “cheap financing,” you rarely bring to mind credit cards. But sometimes high risk loans are way expensive that your business credit card may be a more reasonable option.
Especially for younger companies whose owners have good personal credit; then a credit card for businesses like the Blue Business Plus may be an excellent catch. This card offers Blue Business Plus issues a 15-month introduction phase of 0% APR meaning provided that you pay monthly minimum payments, you can carry balances from one month to the next without accruing any interests.
Business Funding expert, Nathan Hale, founded First American Merchant with his eyes set on helping the backbone of our country, small business owners. His passions include writing/producing music, and travel. First American Merchant is America’s high risk business loans Company, serving both traditional and high-risk Businesses