The adage, “you’ve got to spend money to make money” is especially true when it comes to running a small business. You might be planning to remodel or add features to a commercial building, buy equipment with which to remodel, or hire staff to perform contracting services. While these endeavors may benefit your business, they’re going to require funding.
Because a significant number of small business owners do not have enough expendable income to invest in either setting up or expanding an existing business, this might be an issue. Like many small business owners, you might have applied for funding through your bank and discovered that big banks are not on the side of small businesses.
According to a survey conducted by the NSBA, nearly 27% of businesses studied claimed that they were not able to receive necessary business funding. This is likely due to the fact that big banks only approve around one in every four business loan applications, even though more than 50% of loan applications are for under $100,000.
This means that small business owners are unlikely to receive anything from inventory financing to small business loans for a construction company through the traditional route. Because of this obstacle in the small business world, establishments that specialize in contractor funding have become a solution for many owners.
What is Contractor Funding?
To explain as simply as possible, contractor funding is a financing option intended for small business owners in order to remodel or repair their business spaces quickly and efficiently. Because traditional banks are quick to deny small business loan applications, commercial lending companies have opted to do what big banks won’t.
Whether you’re looking for payroll funding to cover contractor expenses during your remodel, medical practice loans cover the repairs needed in your building, or restaurant funding for a complete kitchen upgrade, this mode of funding is a sensible option to consider.
The process of receiving funding works by filling out an application, much like one would do with a standard loan application. These applications, however, are typically much shorter and simpler than those required at traditional banks. Once approved, funds would be available as a merchant cash advance, and because of this, there is no need to set up financing options with the contractors themselves. You, the owner, would have cash in hand to cover the repairs and remodeling that your business requires to improve.
The Benefits of Merchant Cash Advances
In many ways, a merchant cash advance is more beneficial than a traditional loan even if you’ve been approved. These cash advances are typically approved much quicker than a standard loan, meaning that you won’t have to wait long when it comes to initiating repairs. Due to the short approval process, you’re unlikely to be required to close your business until you are able to meet building codes, should this be an issue you’re facing. In addition, repayment of your funds is designed to fit your business model, rather than requiring large, high-interest payments.
In short, though it may seem like an impossible feat to receive small business funding through a big bank, there are options designed specifically for small business owners. Seeking a merchant cash advance through a commercial funding company is definitely an avenue worth examining.