Celtic Bank Blog

Need Cash Fast? Here's the Best Financing Strategies for Boosting Your Seasonal Working Capital to Hire, Market, and Expand

It’s here: the holidays.

Hotels booked at maximum capacity. Sky-high sales of peppermint and pumpkin lattes. Glittering storefront displays. And six weeks of steadily ringing cash registers. For many, this is a small business owner’s dream.

But without the proper preparation, this “most wonderful time of the year” can quickly turn into the terrifying mouse nightmare from the Nutcracker. Short-staffed shifts with long lines of grumpy customers and fussy children, realizing that you’ve run out of this year’s best-seller toy before the start of December, or simply not having enough money upfront to get your inventory stocked and ready for the influx of business—without the right planning, December is a disaster.

While we can’t tell you whether to stock PlayStations or Pokemon cards, or how to keep your hotel staff happily working on Christmas, or which holiday sweets your customers are going to crave after a long night of caroling—we can make sure you have the money you need to make it all happen.

Working Capital Loans and You

You know the adage: you need to spend money to make money. Nowhere is this more apparent than at the advent of the holidays. But what if you don’t have the money to spend?

Working capital loans can front you the money needed to spend and make money. But some cash comes more quickly… and expensively… than others. So which option should you choose? Well, depending on your timeline, you have a couple difference choices:

1-3 Days: Business Line of Credit

Need cash fast? Try a business line of credit.

A business line of credit is a flexible funding source that gives you immediate access to cash, whenever you need it. Like a credit card, with a business line of credit you’re able to borrow cash anytime from your line of credit up to the allowed limit for your line. As you pay back the money, you’re free to borrow more, up to that total limit.

Business lines of credit can be the fastest funding options for immediate cash needs since the funding is already there and available if you have a line of credit established.

If you haven’t established a line of credit yet, most lines of credit can be approved within days—and some are available after just 24 hours! Making this the perfect option for that Oh no—I’m already out of both the cranberry and the ivory options… moment. With funds readily in hand, you’re able to order what you need, when you need it, and keep your inventory perfectly stocked throughout the holiday season.

Depending on your lender—and your credit—some business lines of credit can carry high interest rates. If speed-of-funds is the most important factor for you, it can be well-worth the costs—especially when you consider the revenue you’ll gain from your seasonal sales. Find the lowest rates possible (sticking with a tried-and-true small business lender can help, especially when compared against the big banks), and go for it!

2-4 Days: Alternative Lending

We live in the FinTech age, where alternative lenders make getting approved as simple as a ten minute loan app. Minimal paperwork, minimal hassles. And funding decisions within minutes—and cash within days.

But it’s important to know that the rates on these loans are often astronomical—ranging anywhere from 24% - 99% APR, depending on your credit! Factor that high cost into a short repayment term (anywhere from 3 months to 3 years, depending on the lender), and you’re looking at large monthly payments that could seriously affect your cash flow for the year to come.

So why choose an alternative lender?

For one, alternative lenders have more funding available than many traditional business lines of credit are able to offer. They can also be faster than traditional lenders. So if your purchase is going to be big but you need the money fast, an alternative lender may be your only option.

Still, although alternative lending can be pricey, there are definitely situations where it can be profitable.

For instance, if one of your suppliers is offering a sale on holiday inventory, you could use the loan to take advantage of the lower rates and stock up your inventory for the busy season. You then markup the price to match the demand and—taking into account the low purchase price you paid—end up with a healthy profit margin that’s perfect for repaying your alternative loan.

5-10 Days: SBA Express Lending

When it comes to cost, your best bet for working capital will be the SBA loan program. SBA loans are federally regulated, with an interest cap that protects you from ridiculously high interest rates, making this one of the most affordable loan options out there.

Because most SBA loans have to be approved by both a lender and the SBA, these loans can take longer to get approved and funded. However, with SBA Express Loans, approval is guaranteed within 36 hours (but can often be received within 24 hours). The speed of funding is then up to you. Have your paperwork ready, be available to your lender to clarify on questions, and you could have funding within 5-10 business days!

Hint: Choosing an SBA-Preferred Lender means that your lender is able to approve your loan in-house—no external SBA review required. Which shaves off even more time in the approval process, getting you your loan even faster!

If you start early enough, SBA Express loans are the perfect way to fund all sorts of holiday working capital needs. Updates for store displays, boosted marketing campaigns to drive in new customers, inventory stocking—even hiring additional help for your business!

Conclusion

No matter what you’re trying to accomplish this holiday season, there’s a working capital loan out there to help you do it. From business lines of credit, to alternative loans, SBA lending and more—you can make sure that, for your small business, the holiday season is both merry and bright!

For more information about working capital loans, their fees, and uses, check out our four-part series on working capital loans, including “A Beginner’s Guide to Working Capital Loans.”

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