Are Quick Loans the Right Fit for Your Business? Let’s Explore!

An accountant calculating how much external funding is needed for the business.

Hey there, savvy business owners! Are you in a pinch and considering a quick loan to boost your inventory for the big Amazon Prime Day or the bustling Holiday season? You’re not alone! Many e-commerce entrepreneurs turn to online lenders who are ready to inject cash into businesses without personal guarantees. These business loans can be a lifesaver when you’re out of options and need funds fast.

In my article, “Strategies to Secure Non-Equity Business Debt (ralaole.com),” I’ve walked you through the most popular borrowing methods. But let’s chat about what it really means for your business to take on these rapid-fire loans.

Here’s the scoop: Online lenders will offer you cash with a borrowing fee attached. They might shy away from mentioning an APR, but typically, the fee rate hovers around 10% or less. Remember the good old days during COVID when the FED rates were low, and we saw fees around 3%? Those were the times!

Now, these loans require you to start making payments pronto – we’re talking weekly, biweekly, or monthly. It’s like a traditional loan or line of credit, and yes, you can totally calculate the APR using an Excel schedule. If you’re curious about how to do that, I’ve got a free schedule that can help – just click here and request your free APR calculation table.

Typically, the APR (annual percentage rate) ends up being one and a half to two times more than the borrowing fee, depending on how often you make payments and when you start. So, before you wave goodbye to other borrowing options, let’s make sure we’re comparing apples to apples. Fees can be tricky to compare with different payment setups.

And here’s another nugget to ponder: Can your business handle the hit if you start funneling a chunk of your revenue into loan repayments? For example, if 15% of your revenue goes to the lender, will you still have enough dough to cover your marketing, sales channels, shipping, materials, and other costs?

If you’re scratching your head over this, don’t fret! I’m here to help you navigate the best borrowing options for your business. Feel free to reach out, and we’ll make sure you’re equipped to make the smartest financial moves for your company’s future.

Happy borrowing, and here’s to your business thriving!

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