Kinds of Dance Studio Financing Options
Kinds of Dance Studio Financing Options
Whether you are seeking traditional financing or some other option, it is important to know which ones are available to you.
For studios that have tried to get financing through traditional lenders, but have not been successful in obtaining it, the next best choice would be to secure a non-bank business loan as an alternative. A mid prime loan is usually used for business working capital purposes, plus it comes with terms shorter than traditional bank loans, and longer compared to higher-interest MCAs (merchant cash advances). In addition, a non-bank business loan needs less documentation, plus funds much quicker than an SBA financing or a bank loan would.
Unsecured Credit Lines
A personal line of credit (LOC) is another way for a dance studio or small business to access funds, having been approved in advance by a lender. As these have been preapproved, a dance studio can dip into the line amount when it requires the funds.
ACH Advance
Similar to a merchant cash advance, this kind of financing involves the sale of accounts receivables or future invoices to a funder to get an upfront lump sum of money. The difference between an MCA and an ACH advance for studios is how the merchant funding company is paid back. With an MCA, the funder splits card sales with their merchant client, but with an ACH advance, a fixed payment is taken every business day from its business bank account with Automated Clearing House (ACH) until the advance amount is paid back.
