Like any type of business, a limited liability company (LLC) will need some funding, both for ongoing, day-to-day expenses and major purchases like equipment or real estate. This post provides some tips and information on different options.

Costs That LLCs Face

Every limited liability company faces certain costs. Some money will be needed to launch the business in the first place. After that, ongoing costs can include insurance bills, hiring employees, upgrading offices or other workspaces, IT support, web design, and marketing. 

Bank Loans

To meet those costs, bank loans are one option for a limited liability company. These typically provide low interest rates and the ongoing support of an established bank. The drawback is that they can be difficult to qualify for and involve a lengthy application process. Additionally, if the loan is unsecured, it will likely have a somewhat higher interest rate.

In some cases, it may be possible to have a bank loan facilitated by the Small Business Administration (SBA). You can learn more about various loan programs the SBA runs here. 

Factoring Invoices

Invoice factoring is another funding option for a limited liability company. During invoice factoring, the lender buys unpaid invoices at approximately 80 percent of their value. Once the payments are collected, the lender deducts a fee of 1 to 4 percent and then sends the remainder of the money to the business. This is a way to access funds immediately rather than waiting for customers to pay.

Business Lines of Credit

Business lines of credit are great to have on hand. They offer a revolving pool of money that can be used for virtually anything, and they are especially helpful as a buffer against unexpected expenses.

Merchant Cash Advances

Another option is a merchant cash advance, which, per The Balance SMB, offers “an advance against future sales.” This setup provides fast money, but it is among the most expensive financing options. 

Whether you’re running a limited liability company or a different sort of business, LMC Alternative Business Capital has plenty of funding options. To learn more, just get in touch!