In business, playing it safe is probably the most dangerous thing you can do. You must get out of your comfort zone and take chances but this usually requires working capital. There are numerous options but a SME working capital loan is probably not the best solution.
When you have the right amount of working capital, you will probably be able to achieve your goals. For numerous reasons, a SME working capital loan will not get you there. Knowing all the facts will show you why this choice should be avoided altogether.
The Disadvantages of a SME Working Capital Loan
SME is the term used for small and medium enterprises in many areas outside the United States. It’s the equivalent of a small business.
A SME working capital loan is available to these businesses that have a presence in places like Singapore, India and Europe. It’s a government assisted financing scheme designed to help companies get through times of slow economic growth.
Still, there are numerous disadvantages of a working capital loan. Repayment is probably the biggest factor. Even if your business eventually fails or you go bankrupt, you will still be personally liable for it.
In addition, there are typically very high interest rates. This means that you will end up paying much more over the course of the fast business loan and your payments will be higher.
What Are Some Alternatives to a SME Working Capital Loan?
An instant business loan is really hard to get nowadays. When people talk about a loan they are often talking about a fixed amount of money paid back over a fixed amount of time. That is fine if you need big ticket items like capital equipment, but what most businesses want is a flexible line of credit.
More and more businesses are finding success with alternative lenders, like Financing Solutions (www.financingsolutionsnow.com). They offer a fast and easy application process, quick approvals and agreeable terms.
With Financing Solutions, you can have a working capital line in place in less than 48 hours. This type of short term business financing is ideal to manage slow sales periods and emergencies.
A business line of credit can be used for daily operations, such as making payroll and purchasing supplies. It’s also great for increasing working capital so your business can have more flexibility. Every business should have one, just in case.
Things Every Small Business Owner Should Know but Probably Doesn’t
Smiles are important — even if your customer gets what he wants, having a representative who is less than friendly when providing it can have a negative impact on your entire business. In addition to purchasing your product or services, clients are buying the experience of working with you.
You must find your unique niche — instead of simply selling, learn why people buy from you over the competition. When you do, capitalize on it to build a great reputation and brand loyalty.
Getting unsecured working capital could save your business — more than half of the businesses that fail do so because they run out of cash. You can prevent this from happening to your company with immediate business funding from Financing Solutions.