Whether you are an individual struggling to come up with some money to pay your rent or the owner of a small business looking for some short term cash to meet your payroll, getting your hands on some quick cash can be crucial.
Employees will quickly become disgruntled if they are not paid as promised and creditors may impose penalties and high interest charges if you are late with a scheduled payment. To avoid these problems, having a contingency plan where you can get fast access to money in an emergency situation is a prudent step to take. Following are several ways to always be ready when you need money fast.
Emergency Fund
Whether you are a homeowner or businessman, you should set aside enough money to pay your bills for 6 months in the event that income does not come in fast enough to cover all of your expenses. A simple bank account or money market fund with check writing privileges is sufficient. This money is not money you are trying to invest, but rather, short term money to help you get by when events cause you to have a financial shortfall.
Cash Advance
A cash advance is usually a loan taken out by individuals who have limited access to other loans with more favorable terms. As long as you are over 18 and have a steady job and a checking account, you will usually qualify for a cash advance or payday loan. Most companies that offer these types of loans will extend you a limited amount of money based on how much you earn and deposit the funds directly in to your account. When the loan comes due in a week or two, they debit it out from your checking account and also take their fee at the same time.
Line of Credit
Many homeowners have a line of credit on their houses. Credit card holders have a line of credit for each card they possess. Businesses might have a line of credit with their suppliers or with their bank. A line of credit provides access to a specific amount of money. If you borrow the full amount, your line of credit runs out and you must pay some or all of it back to use your line of credit again.