One of the most challenging times for any small business is the short-term cash crunch. A business can become cash challenged for many reasons – a volatile sales cycle, longer Account Receivable cycles and feeding the needs of a fast-growing business. Your business can still be profitable, but have temporary low cash flow. The key is using a small business loan to survive the crunch. One way to do this is to take out a short-term small business loan through invoice factoring, a line of credit or other types of financing.
Invoice factoring is a fancy name for getting an advance on your outstanding invoices for a small fee. If your business has large outstanding invoices or receivables where customers pay slowly, factoring can provide you with the funding you need while you are waiting for your customers. With some invoice factoring providers, you are selling your invoices to the financial provider.
A business line of credit is similar to a personal line of credit, such as credit cards or home equity lines of credit, except that the funds are used for business purposes. You have access to a specific amount of financing, but don’t generally make payments or incur interest until you tap into the funds. As you make payments, these funds are available for you to draw again.
There are three small business financing apps that connect to QuickBooks® Online that can make this process easier: BlueVine, Fundbox and QuickBooks Financing. Once you download one of these apps and sync with QuickBooks Online, the app will use your QuickBooks data to tell you if your business may qualify for financing and what your credit limit is. For apps that offer multiple funding options, the providers will tell you which of their funding products may be available to you, whether it is an advance on unpaid invoices, a new line of credit or a more traditional small loan. These apps may help demystify invoice financing, start up loans and business lines of credit.
Before you get started, your business needs to be in good financial standing, your QuickBooks Online account should be active and your data should be up to date. Your business will need to meet each provider’s criteria, and each provider will have to underwrite you and your business. Make sure you understand the terms of any loan product before you commit.1 While we may provide you with options through our products or services, we are not responsible for their products. Please review all your options, and select one based on the needs of your business.
This app offers small businesses two options: factoring and credit lines. BlueVine’s factoring offering enables you to receive payment for a portion (85-90 percent) of an invoice that your client has not yet paid. The remaining portion of the invoice is paid to you directly minus BlueVine’s fees, once your customer pays the invoice. BlueVine sets up a bank account and P.O. Box in your business name, where it will receive payment directly from your client. Most of the time, your client may not realize he or she is paying a third party, since the payments are made to your business name. Customers may get approved for BlueVine’s Factoring offering for up to $2.5 million. In most cases, you can be paid as soon as 48 hours. Their standard current rate is .5-.6 percent per week for QuickBooks customers, with a minimum of one week.
BlueVine also offers credit lines up to $100,000 in equal weekly or monthly payments, with interest over 6 or 12 months, respectively, to pay it back. Customers can pay back early with no penalty. Even if you are not experiencing a cash crunch currently, you may want to establish a line of credit, so that it’s available when you need it.
Fundbox offers a common-sense line of credit that gives small businesses the simple and flexible funding you need to grow. Connect your QuickBooks account to Fundbox in minutes, get a funding decision in hours and get funds as soon as the next business day if approved. Fundbox doesn’t require a FICO score to apply. Once approved, you are able to see a full list of your QuickBooks invoices within your Fundbox dashboard. You are able to choose the ones you want to advance with your Fundbox Credit™, all from within QuickBooks account.
Businesses pay a flat, weekly fee to use Fundbox. While you choose a 12- or 24-week payment term when you initiate an advance, you only pay for Fundbox during the weeks you’re using your funds. Pay the full amount of your advance at any time and any remaining weekly fees from the term will be waived.
QuickBooks Financing helps you find smart financing options for your business, including term loans, lines of credit, invoice financing, Small Business Administration loans and more. It is a marketplace where you can explore offers from a variety of hand-picked partners to find what works best for your unique business needs. Once you log in and start the application, you can see what options you qualify for, all in one place, without any impact to your personal credit score. QuickBooks makes it easier for you to compare rates and terms, so that you know all the costs upfront. We simplify the application process for you by providing your information to the lender you choose, with your permission, saving you time. If you’re approved, you could get funded in as little as 24 hours.
Getting through a short-term cash crunch doesn’t have to be painful. With the right loan or line of credit, your business can bridge the gap and emerge stronger than before.
QuickBooks Financing is licensed as Intuit® Financing Inc., a loan broker, NMLS #1136148. State licenses include: Alabama #22063, Arizona #CBK-0927322 and CBKBR-0119459, California #01960430 and 6054856, Florida # MBR1804, Georgia # 45833, Idaho # MBL-8619, Kansas #MC.0025220, Minnesota #40375193 and MN-MO-1136148, Nevada #4621, New Mexico #01899, North Carolina #173, North Dakota #MB102690, Oregon # ML-5388, Rhode Island #1136148, South Dakota #MB.00034, and Vermont #1238MB and 1239MB.
1Bluevine and Fundbox are not Intuit offerings, and said products and services are provided by third parties. Please review all your financial options, including third party terms and conditions, carefully before you make a selection.