Business lines of credit can be difficult to obtain for young businesses. The most advantageous options typically require flawless personal credit scores, substantial annual revenue, and at least a year in business. This is why Alternative Funding companies like Headway Capital have become increasingly popular as of late. These types of companies’ requirements are significantly looser than traditional lenders. This is mainly because they cater to less established businesses with lower credit scores. Even applicants with rocky cash flow can get approved, and you can choose whether to make weekly or monthly payments.
But Headway Capital is far from the only business financing company with loose requirements for business lines of credit. Other advantages of using Headway Capital, like flexibility and transparency, can be found elsewhere as well. Depending on the nature of your cash flow issues, Headway Capital’s product might not be the best option.
Headway Capital Offers One Product
Younger businesses often assume that they have few options for financing products. Once they find a company that is willing to accept their poor credit or short time in business, they might not even think about shopping for other options. If they did continue their search, they would likely find other companies that offer the same requirements. Some even with better products for their cash flow circumstances.
For example, Headway Capital’s only product is a business line of credit. Other business finance options include short-term business loans, working capital loans, or a merchant cash advance. So, before choosing a company like Headway Capital, you must ascertain that a business line of credit is indeed the product you should be looking for in the first place. You wouldn’t use a business line of credit for the same purpose as a short-term business loan.
Business lines of credit are most advantageous when you are able to pay off the balance as quickly as possible. If you are looking for a long term product (3+ years), a line of credit may not be your best solution.
Some business financing companies offer business lines of credit in addition to a myriad of other options. If you’re unsure of which financing option makes sense for your business, talk to a Funding Advisor who can help guide you to the right solution for your business.
Transparency And Speed: Not So Exclusive Anymore
Another common reason to choose a company like Headway Capital is transparency. Unfortunately this trait is rare in the business financing industry. Many companies are very deceptive with the way they promote their rates and fees. They generally won’t answer any questions unless you fill out an application. Transparency is especially important for businesses that need cash immediately. This generally makes them susceptible to accepting offers that may not be in their best interest.
Headway Capital is lauded for its combination of transparency and speed. The company does a nice job of being upfront about its interest rates, and applicants can receive funding in 1-2 business days, if approved. Both features, however, are not exclusive to Headway Capital. A great deal of companies can approve business lines of credit (and other products) at the same speed, even with poor credit and rocky cash flow.
The alternative lending space is highly competitive which only benefits you. If a company isn’t willing to disclose information you want to know before you apply, that company doesn’t deserve your business. The point is, don’t choose an alternative lender solely on how transparent it is on rates, fees and policies. You need to think about your needs and how a funding company will help you achieve those needs. To ensure you find your best option, work with a broker who has access to many lenders and can fight for you to find the right funding solution.
Headway Capital’s Requirements Are Not Perfect
Lastly, let’s go over some pretty critical imperfections about Headway Capital’s requirements and products. Unlike a number of their competitors, Headway Capital requires a personal guarantee. Business owners need to be cognizant of taking funding with a personal guarantee because it means that if you cannot pay off the debt, the company can seize the business owner’s personal assets. If that is not something you are sure you want to do, find a lender that does not require a personal guarantee.
Headway Capital currently funds up to $100,000. This is not the highest amount in the market. Other line of credit lenders offer $250,000+. Therefore, if you are looking for more capital, you will want to think about a different lender. And finally, it’s important to note that Headway Capital does not work with businesses located in the following states: AK, AR, CT, HI, MI, MT, NV, ND, OH, OR, RI, SD, VT or WV.
Don’t Stop Until You Find The Right Product
Nowadays, you don’t have to look too far to find a transparent, customer-focused company that accepts poor credit, less than a year in business, or lower annual revenue. These common dilemmas should not be the main reasons to only look at one lender without knowing your options.
Remember, you have a wealth of advantageous options to choose from. Your search should never stop until you are 100% certain that you have found the best product for your business.