Tips for choosing the right funding
Before you apply, make sure you meet all of the lender’s requirements. This includes time in business, personal and business credit scores, and revenue.
Pay attention to the approval and funding timelines. Does the lender’s timeframe meet your needs? If you need capital within a week or two, shop around for lenders that can move quickly. Sometimes a lending decision may take longer than expected, so build some wait time into your schedule.
Remember to compare lending offers with similar repayment terms to make sure you’re getting fair pricing when it comes to rates and fees.
Here are a couple of common ways to bridge the gap in cash flow:
Credit cards and lines of credit. For short-term, periodic needs, credit cards and lines of credit can be a quick solution and can be reused as you pay down the balance. But credit limits might be lower than you need and you’ll pay high-interest costs if you carry a balance over a long period.
Online loans. Online lenders are known for offering faster and easier loans, especially for short-term needs. QuickBooks Capital can bridge cash flow gaps, with borrowing limits from $5,000-$100,000 and a repayment term up to 1 year. There are no origination fees and no prepayment penalties with QuickBooks Capital, which is a key feature if you want the flexibility to pay off the loan early. Be aware, some online lenders may charge prepayment fees, so read the fine print.
Things to remember
Bridge funding can help you cover a short-term cash flow gap, but you need to carefully weigh your options before you make your move.
Short-term business funding can also carry higher interest rates than traditional bank loans, so you should comparison shop to get the best deal. Furthermore, it’s important to have a plan to repay the loan and consider how the payments fit into your budget.
If you need to cover payroll and expenses while waiting for payments to come in, remember your options for working capital. Find out how QuickBooks Capital can help and whether bridge funding makes sense for you.