When you run a business, you know that things can change instantly. Whether you run a holiday-based business or are just experiencing a lag in customers, you might suddenly find yourself short on working capital. When that happens, don’t worry. There are plenty of different funding options that will help you keep your company afloat.

Small Business Loans

Many small businesses prefer SBA loans because they have much looser requirements for their funding than typical banks do. Plus, with an SBA loan, you can get anywhere from $500 to $5.5 million to help grow your business.

Depending on the type of loan you’re applying for, you may need to make a specific amount of money each month, have a complete business plan, and show that you can pay the loan back. Additionally, it’s vital to know that some loans can only be used to purchase fixed assets, while others can be used for working capital. So, ensure you know which loan is best for your situation before you apply.

The one downside to SBA loans is that they are notorious for how much paperwork is required and how long they take to process. However, if you ensure that you fill everything out and talk to an SBA loan representative before you submit your paperwork, you’ll likely find that your application goes through without a hitch.

Asset-Based Loans

Asset-based lending comes in two different forms: a loan or line of credit. To be approved for the funding, you must put up some type of collateral. The collateral could be inventory, accounts receivables or equipment.

Asset-based funding is often preferred by businesses that have difficulty getting funding from a traditional lender. Additionally, it is considered lower risk because the bank is guaranteed to be protected if you stop making payments.

A primary plus side of asset-based lending is that you won’t find that there are qualifications put on how you can spend the money. As long as the money is used for your business, you can use it however you would like.

Invoice Factoring

If you struggle to pay your bills on time because customers won’t pay their bills on time, you should consider invoice factoring. Invoice factoring is beneficial if you don’t have the time to wait for approval for a traditional loan or fear that you’ll be turned down for one.

With the factoring, a company will buy your accounts receivables at a discount and collect the outstanding debts from your customers. As soon as the invoices are paid, the factoring company will pay you the remainder of the invoice but subtract their fees and any interest payments.