Four alternative payment methods for entrepreneurs
It doesn’t matter what type of business you run, handing money in some form is essential.
Whether you’re taking payments from clients and customers or paying out yourself on business expenses, you need an efficient, affordable payment method.
You also need a payment method that will help you to manage your cash flow – especially if you’re a startup or small business with a tight budget and limited amount of cash to play with.
The last thing you want is to need equipment or services to function as a business, but no means to pay for them right now. With that in mind, here are four alternative payment methods you might want to investigate.
1) Credit and prepaid cards
Credit cards have long been used to pay for business expenses. You’ll find a large range of business credit cards available, each offering different limits and rates of interest.
However, while these can be great for short-term cash flow, they can prove dangerous in the long-term if you find it hard to stick to a set expenses budget. Another option that may be more suitable in this case is a prepaid business account. While it won’t provide you with credit, it can help you to stay within budget.
You can use a pre-paid card to pay for specific expenses such as paying suppliers or freelancers. Or, you could use it to cover travel expenses. This helps you to stay within your budget, preventing you from getting into debt.
Loans are another popular payment option. The range of loan products on offer has changed dramatically over the years. These days, you’ll find loans from a wide range of providers not just banks.
You have personal loans, business loans and payday loans for example. These provide a large lump sum which can be especially helpful when you’re starting up a business or trying to grow it.
3) Lines of credit
One of the more recent forms of finance for businesses is a line of credit. This gives you a set amount of credit you can use for business purposes. The amount you receive will depend upon numerous factors such as how much you earn or spend, along with your credit history.
Lines of credit can be useful to have if you experience frequent late payers. They can also be used to pay suppliers if your business experiences a quieter period.
4) Mobile payment solutions
Finally, mobile payment solutions have also become common for the self-employed. Consumers are consistently looking for convenient ways to pay and mobile solutions have helped with this. Allowing you to pay via a mobile phone app, this new technology is becoming more popular.
These are just some of the alternative payment solutions for businesses. If you want to stay ahead and offer your customers a consistent, reliable service, getting on top of your cashflow is essential. Before taking out any form of credit, it’s important to consider the repayments and potential impact it could have on your business.
Photo by Lee Campbell