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If you are in need of quick cash for a short-term loan to get you through to your next payday, then a payday loan may be right for you. These are different than long-term loans, which are usually needed for large purchases, such as a car or a home improvement project. Instead, these are short-term loans, or payday loans, which are designed to help individuals when their next paycheck just can’t come quickly enough.The majority of payday loans range from $100 to $500, and most payday loans have a short timeline, usually less than two weeks.Payday loans are used for a variety of household and personal expenses, and they are ideal for those individuals that may not have available credit or other means of acquiring cash for the short-term.The following list details the most common reasons individuals seek payday loans:1. Groceries – There are a few things that we simply cannot live without; groceries are one of them. Have you ever paid all of your monthly bills only to find out that you didn’t leave enough for basic, household items and food? If so, then a short-term payday loan may be right for you.2. Gas Money – With the rising cost of gasoline, many hardworking individuals have experienced a hard time paying their bills and putting gas in their cars. The bottom line for most people is that no gas equates to no job. We all need to put fuel in our vehicles so that we can get back and forth between work, pick our children up from school, and run errands, for example.3. School Lunch Money – You don’t get paid until next week and you find out that your children’s lunch money is due tomorrow! What do you do? If credit is a problem and your bank account is tapped, you may want to consider a payday loan to provide your children with money for their school lunches.4. Utilities -If your gas or electric bill is due and you don’t have a paycheck coming until next week, you may want to consider a payday loan to pay your utility bill and make sure that you don’t lose your utility service because of non-payment. This will also keep your credit report free of late payment marks.5. Car Payment – Just like gas money, you need your car to get you back and forth from work, among other things, and you can’t afford to have it taken away because of non-payment. Because of this, you may want to consider a payday loan to cover your car loan until your next paycheck.6. Rent – Don’t let your landlord continue harass you for your rent money when you know you won’t have it for a couple weeks. Instead, get your landlord off your back by taking out a short-term payday loan to cover your rent.7. Car Repair – If your car isn’t running, it isn’t doing you much good. If you car needs repairs and you simply don’t have the cash to cover it, you may want to seek a payday loan to get your car up and running.8. Medical Emergency – Medical co-pays, deductibles and out-of-pocket expenses related to a medical emergency are certainly a must when dealing with a serious situation. A payday loan will help to pay these expenses until you receive your next paycheck.9. Personal Goods – Personal goods, such as toiletries, medications and diapers, are often not thought of as necessary, except when you are without them! Payday loans are a great way to provide you with extra cash to cover these incidentals until your next paycheck.10. Household Goods – What do you do if your refrigerator breaks and you don’t get paid until next week? A payday loan can come in very useful in these types of tight financial situations.When you have an emergency or basic needs that must be fulfilled, a payday loan is a great way to manage your expenses before your next paycheck is cut.

There are several potential financing options available to cash-strapped businesses that need a healthy dose of working capital. A bank loan or line of credit is often the first option that owners think of – and for businesses that qualify, this may be the best option.

In today’s uncertain business, economic and regulatory environment, qualifying for a bank loan can be difficult – especially for start-up companies and those that have experienced any type of financial difficulty. Sometimes, owners of businesses that don’t qualify for a bank loan decide that seeking venture capital or bringing on equity investors are other viable options.

But are they really? While there are some potential benefits to bringing venture capital and so-called “angel” investors into your business, there are drawbacks as well. Unfortunately, owners sometimes don’t think about these drawbacks until the ink has dried on a contract with a venture capitalist or angel investor – and it’s too late to back out of the deal.

Different Types of Financing

One problem with bringing in equity investors to help provide a working capital boost is that working capital and equity are really two different types of financing.

Working capital – or the money that is used to pay business expenses incurred during the time lag until cash from sales (or accounts receivable) is collected – is short-term in nature, so it should be financed via a short-term financing tool. Equity, however, should generally be used to finance rapid growth, business expansion, acquisitions or the purchase of long-term assets, which are defined as assets that are repaid over more than one 12-month business cycle.

But the biggest drawback to bringing equity investors into your business is a potential loss of control. When you sell equity (or shares) in your business to venture capitalists or angels, you are giving up a percentage of ownership in your business, and you may be doing so at an inopportune time. With this dilution of ownership most often comes a loss of control over some or all of the most important business decisions that must be made.

Sometimes, owners are enticed to sell equity by the fact that there is little (if any) out-of-pocket expense. Unlike debt financing, you don’t usually pay interest with equity financing. The equity investor gains its return via the ownership stake gained in your business. But the long-term “cost” of selling equity is always much higher than the short-term cost of debt, in terms of both actual cash cost as well as soft costs like the loss of control and stewardship of your company and the potential future value of the ownership shares that are sold.

Alternative Financing Solutions

But what if your business needs working capital and you don’t qualify for a bank loan or line of credit? Alternative financing solutions are often appropriate for injecting working capital into businesses in this situation. Three of the most common types of alternative financing used by such businesses are:

1. Full-Service Factoring – Businesses sell outstanding accounts receivable on an ongoing basis to a commercial finance (or factoring) company at a discount. The factoring company then manages the receivable until it is paid. Factoring is a well-established and accepted method of temporary alternative finance that is especially well-suited for rapidly growing companies and those with customer concentrations.

2. Accounts Receivable (A/R) Financing – A/R financing is an ideal solution for companies that are not yet bankable but have a stable financial condition and a more diverse customer base. Here, the business provides details on all accounts receivable and pledges those assets as collateral. The proceeds of those receivables are sent to a lockbox while the finance company calculates a borrowing base to determine the amount the company can borrow. When the borrower needs money, it makes an advance request and the finance company advances money using a percentage of the accounts receivable.

3. Asset-Based Lending (ABL) – This is a credit facility secured by all of a company’s assets, which may include A/R, equipment and inventory. Unlike with factoring, the business continues to manage and collect its own receivables and submits collateral reports on an ongoing basis to the finance company, which will review and periodically audit the reports.

In addition to providing working capital and enabling owners to maintain business control, alternative financing may provide other benefits as well:

It’s easy to determine the exact cost of financing and obtain an increase.
Professional collateral management can be included depending on the facility type and the lender.
Real-time, online interactive reporting is often available.
It may provide the business with access to more capital.
It’s flexible – financing ebbs and flows with the business’ needs.
It’s important to note that there are some circumstances in which equity is a viable and attractive financing solution. This is especially true in cases of business expansion and acquisition and new product launches – these are capital needs that are not generally well suited to debt financing. However, equity is not usually the appropriate financing solution to solve a working capital problem or help plug a cash-flow gap.

A Precious Commodity

Remember that business equity is a precious commodity that should only be considered under the right circumstances and at the right time. When equity financing is sought, ideally this should be done at a time when the company has good growth prospects and a significant cash need for this growth. Ideally, majority ownership (and thus, absolute control) should remain with the company founder(s).

Alternative financing solutions like factoring, A/R financing and ABL can provide the working capital boost many cash-strapped businesses that don’t qualify for bank financing need – without diluting ownership and possibly giving up business control at an inopportune time for the owner. If and when these companies become bankable later, it’s often an easy transition to a traditional bank line of credit. Your banker may be able to refer you to a commercial finance company that can offer the right type of alternative financing solution for your particular situation.

Taking the time to understand all the different financing options available to your business, and the pros and cons of each, is the best way to make sure you choose the best option for your business. The use of alternative financing can help your company grow without diluting your ownership. After all, it’s your business – shouldn’t you keep as much of it as possible?