Running a small business comes with all kinds of unexpected obstacles, and without the funds to address sudden costs, you could find yourself struggling to keep your head above water. Luckily, there exist quick financing options like payday loans that you can utilize to cover unexpected costs. Here are five ways you can use a payday loan when you are the owner of your small business.
1) Legal Fees
If you’re facing a lawsuit and need to hire an attorney, a payday loan could be a good option to help with the unexpected legal fees. A payday loan can help cover the expenses of the retainer costs if you don’t have enough in savings, and funds can become available in as little as one business day.
Legal matters can often be expensive, even if you don’t hire an attorney. Perhaps your business was fined by state or local authorities for failure to comply with certain regulations, or you received an unexpected tax bill for last year.
2) To Cover What Insurance Won’t
Even if your business is insured, it’s not an all-encompassing safety net for every cost. Insurance providers often won’t cover specific expenses like unintentional damage or flooding. When an unexpected expense arises that your insurance won’t cover, you need to get your business back to operational status as quickly as possible.
A payday loan can help cover the cost of accidental damages or even emergency repairs to the building itself. When insurance doesn’t cover your unexpected expenses, a payday loan can be just the thing to get you back on track and your business up and running again.
3) Loss of Inventory
In the event of a fire or natural disaster, your business may be subjected to the sudden loss of inventory; the very thing that drives sales and keeps the business running. The cost of replacing damaged or destroyed inventory may prove too much for a small business and could require some short-term emergency funding to get things back in order quickly.
This quick funding allows you to replace inventory in an emergency, keeping your business on track and buying you some time until you can come up with the entire amount for damages. You won’t want your business left without anything to sell, as this could spell disaster even with the smallest of losses. Payday loans can be secured in as little as one business day, so you can replace your lost inventory within a short time.
4) Repair/Replace Equipment
Equipment eventually breaks down and needs to be either repaired or replaced entirely. With expensive production equipment or electronics like laptops and printers, repair or replacement costs can be quite high. If you suddenly find that a crucial piece of your business is down for good, you’ll need emergency funds to secure new equipment.
Your business is entirely dependent on your equipment functioning properly, but sometimes regular maintenance is not always enough to keep machines running like new. Sometimes a certain piece of equipment simply quits working unexpectedly. Computers are one such piece of equipment that often runs into errors, and if your computers are outdated, they’re more prone to failures and malfunctions.
5) Personal Emergencies
There are some payday loans that should only be used for personal, unexpected emergency expenses, which is something you might face if your small business is your only source of income. Should your business find itself in an unexpected financial crisis, your personal finances could also be at risk, and something like rent or groceries certainly can’t wait until next month.
While you should always have savings for emergencies, easy payday loans could help you secure your personal finances in times of sudden unexpected financial crisis. Sometimes quick funding is simply a necessity to get you back on your feet, and payday loan vendors have a list of criteria to aid in the convenient application process.
Conclusion A short-term payday loan can help you cover expenses in the event of an emergency and should be reserved only for such times. Taking out payday loans each month to keep your business afloat is not recommended due to high-interest fees and other costs. Use high-interest loans only when you need to!