Business emergencies can come in anytime! Whether it’s the result of economic recession or change of a government policy. The success of a business depends on how well you are prepared for emergency situations especially when your business is facing liquidity problems.
1- Opt For Personal Financing
One of the best ways to raise money quickly during an emergency is to opt for a personal loan. Emergency means you require the capital as soon as possible and personal loans can get you cash in as little as 72 hours.
A personal loan is unsecured meaning you don’t need any collateral for the loan. The bank cannot seize your property in case you fail to repay it. All you need is a good credit score and all the formalities or paperwork is done quickly. This helps to raise the required capital as fast as possible.
2- Look For The SBA Funding
Very few people are aware of, but SBA funding is one of the easiest ways to get loans quickly. The process is simple:
- Answer a few questions about your business.
- Receive an email that contains the list of lenders who are ready to provide you a loan.
- Compare the rates, do the paperwork and apply for the loan. The entire process happens online and is completely secured.
3- Borrow Against the Cash Value Raised From Insurance
If you have an insurance policy then you can borrow money against the cash value from the insurance company. Moreover, you also have the option to dump the policy and get all the money you had saved until now.
However, be cautious and cancel the policy only when the other options are not working because money saved in the policy is your saving which can be used at the later stages of your life.
4- Take Advance From Your Credit Card
If you have a credit card then you can get some cash as advance. This option can come in handy if you need a relatively small amount of money. You can withdraw cash upto your cash advance limit which is less than your credit limit. You can check the cash advance limit in your recent credit card statement.
Also, the interest rates that banks charge if you are taking an advance using your credit card is relatively higher. So, make use of this option only when needed and ensure to quickly repay back the amount once you are done with your business.
5- Take the Help of Microfinance Services
Microfinance services are a boon for small business owners. Microfinance companies provide small business loans known as micro loans to people who can invest the money in their business. You can easily get a loan in the range $10,000- $1,00000 through microfinancing.
However, such loans involve a small processing fee and the rate of interest applied is also high. If you are in immediate need of capital then opt for micro loans and you can easily get them through selected MFIs (Micro Financial Institutions).
The above-mentioned ways are some of the easiest to opt for when you are in urgent need for money in order to save your business.
However, it is important to carefully select the channel for organizing capital considering the long-term commitments involved in them. Of all the options mentioned above, personal loan and credit card advance are the best channels to arrange the required capital as both of them have the least risk.