Its not news cash flow problems kill offstartupsright and left.
They almost killed off ours.
There was just one problem.
A call from said payment processor informed us that wed surpassed our $1000/day limit.
40% off TNW Conference!
As we brought in new clients, our efforts to speak to our payment processor fell through.
We, fortunately, got by with help from a good friend.
Luckily, these days there are more options for startups seeking access to capital.
While traditionallendershave minimum monthly revenue andbusinessage requirements, here are some alternatives to consider for young cash-strappedcompanies.
And one viable route to accessing capital is taken outloansthrough the payment processor themself.
Pioneers in this throw in ofloanoption, PayPal currently offersbusinessownersPayPal Working Capitalbusinessloans.
PayPal will also charge a one-time fee based on the repayment percentage you choose and your PayPal sales history.
From the look of things, fast-growing payments startupStripemay seek to borrow and build on PayPals concept.
For startups needing cash quick, payment processors can offer very fast access to funds.
Theyll also lend more up to $250,000.
Still,loanscome with a prepayment discount that make them advantageous forbusinessescertain they can pay off theloanearly.
OnDeck will forgive 25 percent of the remaining interest due if theloanis paid off early.
At the very same time, theseloanscan also have costly interest rates that prove unmanageable.
A handful of these platforms have appeared, allowingcompaniesa way to borrow against any crypto assets they own.
Other cryptocurrencylendingplatforms include Bitfinex and BitBond.
Cryptocurrencies do also have other risks.
Of course, there are advantages and disadvantages inherent to eachlendingoption.
One thing wont change though, which is thatcash flowremains hard, and never more so than with hardwarecompanies.
It sold so well that thecompanywent bankrupt after six months due to a requirement to pay his supplier upfront.
Irregardless of the path, doing your homework well may be the key to keeping your startups doors open.
Story byConrad Egusa
Conrad lives in Medellin & NYC and profiles startup ecosystems during his travels.
