Steady cash flow is an ongoing challenge for small businesses, which often must deal with the ebb and flow of customer activity. Some businesses see a surge in sales over the holiday season, while others see the bulk of their business during the summer. Even if your fluctuations aren’t quite that dramatic, you likely experience the occasional slow period.

Because of the nature of business, services are available to help entrepreneurs get through the lean months. While small business owners could rely on personal credit cards or bank loans, these options have their flaws. Short-term loans, available through a variety of websites, are a great way for businesses to get the cash they need to make it through the lean months. Here are a few services that can give your business a short-term cash infusion that you can pay back once business is thriving.

SBA Microloans

The Small Business Administration (SBA) is designed to help small businesses succeed in their goals. This includes loan programs that can provide the start-up capital a business needs. The SBA’s most common loan program is the 7(a) loan, which includes special-purpose loans and export loans. For businesses in need of a short-term cash infusion, however, there’s the SBA microloan, which gives up to $50,000 in working capital. These funds can’t be used to pay off existing debt or to purchase real estate, but they can be used for inventory, supplies, furniture, and equipment.

The average SBA microloan is $13,000 and repayment terms depend on the amount of the loan and the repayment term. Rates generally fall between eight and 13 percent and the loan must be repaid within six years. Businesses interested in applying for an SBA microloan will be directed to a local SBA intermediary, who will guide them through the process.

Kabbage

Kabbage issues businesses a line of credit between $2,000 and $100,000 that they can then draw against when they need money. Instead of going solely by your credit score, Kabbage researches your business and bases its approval on accounts you already have. You can link your accounts at sites like Square, PayPal, Amazon, Etsy, and even your business checking account to allow Kabbage to see that you’re a viable business. This is good news for a new business that is still struggling to build its credit rating.

Once you’ve been accepted, you can draw on your line of credit as often as once a day. You’re required to pay back only the amount you borrow, so even you’re approved for a credit line of $100,000, you’ll only pay for what you use. Fees are between one percent and 13.5 percent of the amount you borrow for the first two months, then only one percent for the remaining four months of the six-month payback term. You’re required to pay back one-sixth of the loan each month for the six months following the loan. If you pay back the full amount early, you’ll be able to avoid the additional monthly interest.

PayPal Working Capital

Since many small businesses already have PayPal accounts in place, the service is a natural option. Perhaps one of the best features of PayPal’s lending option is that no credit check is required. You merely apply and wait for approval, which usually comes in mere minutes. The service is offered specifically to businesses that have had a good sales history. This means a business can qualify without having a credit score.

The loan is repaid as a portion of your sales following the loan. You choose the portion of your sales you’ll pay back to get the loan paid off. If you have no sales on a particular day, you won’t have to pay anything toward your loan, but the next day you have sales, that portion will come out. Once you’ve paid off the loan, you can request a new loan to help you grow your business even more.

Fundbox

Most businesses have unpaid invoices. Fundbox helps them out with that by advancing cash for those invoices that have not yet been paid. You simply complete a short application, add your unpaid invoices from your accounting app, and choose unpaid invoices whenever you need additional cash. Fundbox advances the money to your bank account for you to use.

Once you’re finally paid, you can pay the remainder of your balance due to avoid fees. Otherwise, Fundbox takes out its payment in installments over 12 weeks in equal installments. A fee is also added to these repayments, so it’s important to pay off the balance whenever you can. The app is designed to solve one of the biggest problems for business today: maintaining cash flow when customers take 30 to 90 days to pay.

The availability of short-term loans means businesses can get the funds they need to continue through the leanest months. Since a small business’s survival can be severely hampered by cash flow problems, these options could keep a business from failing within the first few years, allowing it to make it past those tough times to grow and thrive.

I am a content writer for Due. I love to put up financial content that helps businesses be more savvy online. If there is ever something you want to know or learn, message me and we'll put it up on the Due Blog.

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