Expanding Your Small Business: The Benefits Of Obtaining A Working Capital Loan Through Your Payment Processor
ShareMost small business owners dream of being able to expand their business and ultimately become more successful. If you share in this dream, you already know that making this dream a reality will often require outside financing. While there are several different options available for you to seek the financing you require, you should know that one of the most beneficial options is to seek a working capital loan through your payment processor. Keep reading below to learn more about why this financing option is so beneficial.
Working Capital Loans Are Not Based On A Credit Score
One of the biggest hurdles that many small business owners face when trying to secure financing to expand their business is that they either do not have a sufficient business credit history or their personal credit score is subpar. This issue often prevents individuals from getting approved for financing through a traditional lender such as their bank. This is not an issue when obtaining a working capital loan through your payment processor since your eligibility will be based on your history of processing payments rather than on your credit score. This can make qualifying for the funding you need much easier.
Repaying A Working Capital Loan Is Easy And Convenient
Working capital loans are repaid in a nontraditional manner. Rather than you paying a set loan amount back each month, your loan will be paid through a percentage of any sales that you make. This loan payment will be automatically withheld by your payment processor. Not only does this make it easy to submit loan payments, but it also ensures that you are only required to pay on the loan when you have payments coming in. This can be especially beneficial for businesses who see their sales fluctuate frequently throughout the year or even during different times of the month.
Working Capital Loans Offer Flat Fees Rather Than Traditional Interest Rates
When obtaining financing through a traditional lender, you will be required to repay the amount of the loan plus interest. If your credit score is not the best or your business is still relatively new, there is a good chance that the interest rate assigned to your loan will be rather high. This is not an issue when getting a working capital loan through your payment provider since these loans come with a flat fee rather than an annual interest rate. This will not only allow you to avoid high interest rates, but it will also ensure that you know exactly how much you will be paying for your loan in the long run.