Doing business isn’t always perfect. Much like the real world, there are unexpected costs. Maybe your daughter breaks her arm climbing a tree, or maybe your landlord increases the office rent by 10%. Both scenarios may require extra capital that isn’t available. Maybe all your personal funds are tied up in your new house. In that scenario, many people would consider a home equity line of credit. But in business, when you don’t have to stake personal assets for business financing, what are your options for financing unexpected business costs?
Small Business Loans for Financing Unexpected Business Costs
A traditional bank loan is an appealing option for many entrepreneurs seeking small business loans. However, securing sufficient funding or any funding at all can be difficult for small and new businesses. Additionally, unless you have an existing bank loan, the process could be too slow for financing unexpected business costs.
Small Business Line of Credit
A line of credit is an awesome business financing tool that offers more flexibility to your business financing than a typical bank loan. Yet, when you’ve reached the end of the line of credit, you may need additional financing to meet overhead, cover payroll, and deal with the unexpected.
Invoice Financing Unexpected Business Costs
Invoice financing services offer a business of any size and any age flexibility and speed in financing. By advancing payment on open invoices, a factoring company helps de-clutter a company’s accounts receivable. This frees up your working capital. Further, you already made the sale. So, you do not have debt or repayments to make. Invoice factoring solutions help cover the unexpected costs of business and weather any storm that may be coming.
Small Business Investors
Some business owners prefer to trade equity for financing. If you can find investors for your business, consider this option. Choose the right investor for your business and be confident they won’t interfere with how you run the business. Ultimately, the drawbacks of investors is that you will be sharing your control over how the business runs, and the funding is not always reliable if you cannot find an investor or you cannot find enough investor financing.
How to Find Financing for Unexpected Business Costs
If you run a small business, you need flexibility in your financing plan. Unexpected costs pop up out of nowhere, and you don’t want to be sitting on your hands when they do. A flexible business funding solution will work with your business to cover the unexpected costs when they arrive. Ideally, your business has open communication with your financing partner, and they can work with you to meet those costs. Be sure to weigh your options and go with the financing plan that works best for your business’ needs.