Cashflow management tools are one of the most common kinds of financing, and they’re available in many forms. Each has its advantages and disadvantages, but they all amount to the same thing, and that is a fast way to raise working capital when you have expenses to cover if you are going to keep working. Sometimes companies finance business assets for this purpose, but at other times a fast loan based on your income and general financial health is the best way to get money quickly, especially when you know you’re going to be seeing a payday soon. These short-term loans can be secured with assets or unsecured, and often lenders offer both options.
While banks sometimes offer loans for working capital, it’s far more common to find these products at private lending firms where investor money is put to use financing business loans and other instruments for the commercial sector. Many of these lenders have a wide umbrella of loan options, with a few different structures for raising working capital. Often, these same lenders offer asset-based options, unsecured cash flow loans, and hard money bridge loans to make sure they can serve all their customers’ needs. Each of these loans has its own unique way of opening up capital you can use to keep your business running.
Hard money loans are secured with assets like real estate or equipment to hold down capital costs. Lenders determine the range of terms they offer and there is a lot of variety, but generally speaking these are short-term loans. For a little more in financing charges and a higher interest rate, you can usually also opt for an unsecured loan, although usually the maximum you’ll be approved for is smaller than it would be for a secured loan. Either way, you have options that leave your business assets alone for the time being.
Alternative lending institutions and companies that use methods like peer to peer lending are also technically private lenders, but they are called alternative lenders because they specialize in alternatives to traditional loan products. You can usually find working capital loans and bridge loans through them, as well as cutting-edge products beyond the selection found at more traditional private lending firms. Alternative lenders take on a variety of forms, including fintech apps seeking to provide alternatives to traditional lending. It’s worth taking a look at some of today’s cutting edge options, that way you know you’ve selected the best product for your business structure and industry.