Is It Possible to Have a Business Loan without Interest?

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It seems like paying interest is a fact of life for business owners and managers, something that’s nearly impossible to avoid. Unless you are fortunate enough to have a large sum of money when you start the business – and sometimes even then – you will likely face relying on a loan or a line of credit, both of which require interest payments. However, while it’s not possible to have a loan without interest, it is possible for businesses to get a source of cash without paying unreasonable interest at all.
Factoring Cash Advance
One interest-free financing alternative to a loan is credit card factoring. This involves handing over processing of the revenue received at your company in the form of credit card payments. You get the cash instantly without waiting for a statement due date or the card to clear and all you pay is a small percentage of the total amount owed to you. It’s not a loan – just an advance on revenue that’s coming to you regardless, but money you could use right now to make a big difference in your company.
How to Qualify
To qualify for a factoring cash advance, you need only have been in business for a month and to have $3000 or more each month in credit card revenue. With no open bankruptcies and at least six months remaining on your lease, you will qualify.
Line of Credit
There is interest associated with a business line of credit, but it’s not the same as a business loan. With a loan, interest starts accumulating from day one on the full sum of the money you’re approved for – whether you intend to use all of that money or not. With a line of credit, you’re charged no interest until you withdraw the money, and then the interest is based on the amount of money you’ve withdrawn, not the full amount approved. For example, you may be approved for a line of credit for $100,000, but if you don’t take anything out for a month and only wind up taking out $10,000 for an unexpected expense, the interest begins when you take out the money and is only based on that $10,000 you took.
Ask a business credit and capital service about the advantages of credit card factoring and starting the process at your company. While it’s possible your business is best served by both factoring and a line of credit or loan, the more you rely on factoring instead of the loan, the less you’ll pay. With a service fee limited to a small fraction of each transaction, factoring allows business owners to put the nervousness about accumulating interest behind them.