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In a perfect world, every business owner would have enough positive cash flow each month to pay the bills.
In a perfect world, everyone would have perfect credit and they would be able to get the cash they need when they need it.
Unfortunately, it’s not a perfect world, and many business owners find themselves in financial trouble more than once.
Even some of the most successful business people in the world have declared bankruptcy and followed nontraditional routes to secure the funds they needed to keep their businesses and themselves out of trouble.
Nontraditional financing options are typically used by people who don’t have great credit and need cash quickly. Given the challenging economy Americans have gone through in recent years, many people’s credit scores were harmed. Short-selling homes and foreclosures became common place not too long ago when what many people thought they’d never have to do became a necessity.
The most important things to remember if you need to pursue nontraditional financing options for cash flow issues is that the interest rate you’ll be charged is likely to be very high—higher than a credit card. Use this type of financing for extremely short-term needs, meaning you can pay it off within days or weeks at the most.
Read the fine print, know what the APR and loan terms are up front, and make sure you understand how much it will truly cost you to repay the loan if you can’t do so within a few days or a few weeks.
If non-traditional financing is right for you, here are some of the most common options to consider.
A payday loan is a loan based on your upcoming paycheck. There are many online and brick-and-mortar options to obtain a payday loan.
A title loan is a loan based on your car’s value. It’s easy to get an online title loan estimate at any time.
There are many websites that allow you to enter your personal information and receive personal loan offers from a variety of financial companies. Even if your bank declined your application, one of these providers just might say yes.
Remember, before you commit to a non-traditional financing option, ask for the Truth in Lending Agreement, read it, and make sure you fully understand it.