Digikredit Finance Pvt Ltd. | 20 Aug, 2018
SMEs require flexible capital while still in its growth phase. As
a business grows, the need for extra finances always crops up. Often, business owners who own business credit
cards,turn to taking to a cash advance on the credit card. A cash
advance typically means that the bank allows
clients to withdraw an amount of cash immediately, subject to
a high interest rate.
Are you a small business
owner planning to tread the same path? Before you do, consider some of these
alternativesbefore applying for a cash advance on your
business credit card:
Need to keep your business afloat? Factoring finance could be a good
idea for SME India.Ideal for B2B
companies, factoring is when a business sells
its accounts receivables to a financing company. This now means that the
factoring finance company owns them, and the customer becomes responsible for
paying them instead of the company.
Businesses often need finance to cater to client orders and,often, theyturn
to Purchase Order Financing for business funding.
Purchase Order Financing involves one company paying the supplier of another
company, for goods that have been ordered to fulfil a customer requirement.
Several businesses turn to Purchase Order
Financing for business funding because, unlike banks, this financing model
mostly assesses the financial strength of the company that has placed an order
with a business, instead of the business itself.
#3 Credit cards
Small business payments are popularly done through credit
cards, especially when the business owner has not been in the business long
enough to qualify for a bank loan. Credit cards are also used as they
facilitate faster access to capital when compared to traditional loans.
#4 Merchant cash advance
You can also apply for a merchant cash advance for quick finances.
merchant cash advance is a type of loan that depends upon the future revenue of
a business. This type of business funding
puts any small business in a very comfortable financial position, ensuring funds regularly flow
through the business merchantâs account. This is a source of business
financing preferred by many small business owners.
#5 Short term alternative business loan
businesses often need quick loans for immediate financing. This is where
short-term loans come in. Such loans are often repaid within 90-120 days. Not
only do they help a business keep afloat in the time of need, but since their maturity
tenure is shorter, they need to be repaid faster, reducing the long-term load
on a small business.
** By association with Digikredit Finance Pvt Ltd., an NBFC, which
operates under the name SMEcorner and offers credit to small business owners.