How to Get Working Capital With a Cash Flow Loan
One of the greatest challenges facing small businesses is a lack of working capital. Slow seasons, unexpected payments and cash flow issues all reduce your working capital and can cripple your business before it gets off the ground. If you’re struggling to keep the working capital you need to grow your business, learn how an ACH loan can help.
ACH, or Automated Clearing House, is a type of loan that can save your small business from late payments, layoffs or from avoiding large clients. An ACH loan works by giving your lender permission to withdraw an agreed-upon amount directly from your checking account. Basically, your lender is giving you an advance on your future sales to use for immediate expenses.
Unlike a merchant cash advance, however, these sales don’t have to be related to credit card processing. An ACH loan works whether you’re primarily paid with cash, credit cards, checks or any other type of payment. This short-term financing option is incredibly flexible. Because you receive a forward of your sales income, you can use it however you need. Boost your working capital, take on larger clients or pay your bills on time with your ACH financing.
Of course, there are some downsides to this loan type. While it’s less risky than other short-term options, you may still have a higher interest rate than other, more long-term options. The accelerated payment schedule means that you may have to find a solution to make payments on time. It’s an excellent financial tool to purchase the inventory you need to land a major client, but if your business is experiencing an extended slow period you may not have the financing you need to pay it off in time.
Once you’ve determined that an ACH loan is right for you, shop around to find the best lender. Every lender has slightly different rates, terms, APR and other conditions. Some lenders are far more willing to listen to your unique position and craft a personalized loan, while others offer a single, set financial package.
Take time to review the best lenders in your area before you commit to an ACH loan provider. Once you do, you can enjoy improved working capital and set your cash flow on the right track for sustained growth. Grow your business and continue to provide excellent products and services to your current and future customers with an ACH loan today.