Travel agencies have been helping new and seasoned travelers for decades.
While they’re part of a popular industry, these businesses do experience seasonal ups and downs, however.
When that happens, travel agency financing can allow owners to meet increased demands or power through slower seasons.
Here are several ways financing can help as well as loan options to consider.
Reasons to Apply for a Travel Agency Loan
With many travelers using self-booking sites, such as Expedia and Airbnb, it’s vital to stand out and do what it takes to bring in business. Reasons to turn to travel agency financing include:
Generate business by getting your name out there. Whether you want to invest in a billboard or online advertising, you’ll need capital. In smaller cities, a billboard could run you a couple thousand dollars a month. You also could spend that much, if not more, on online advertising.
Maintain a Website
Maybe you don’t have a website yet and would like to invest in one. Or perhaps your site hasn’t been updated since its initial launch. Whether you’re looking to improve speed, usability, layout or another feature, you’ll need help. Needless to say, the costs can add up when you want to hire a website developer, graphic designer, copywriter or user-experience specialist.
Are you still using a boxy desktop for your business? Do you need new software? If you want to purchase the latest laptop or slim desktop and don’t have the funds you need, a business loan can help.
Cover Rent and Utilities
If you run your office out of a retail location, the costs to keep the lights on and doors open might be more than you can bear in a month. A loan can help you cover operating expenses so you can keep business running as usual.
Best Types of Travel Agency Financing
Here are a number of types of financing options and business loans for travel agencies.
Business Line of Credit
If you want access to financing you can turn to it anytime you need it, consider a business line of credit. Similar to a credit card, it’s the most flexible type of financing, whether you need to cover an emergency expense or need help getting through a slow month.
Business Term Loan
If you’re approved for a business term loan, you’ll receive one lump sum of funds, which you can use for virtually any business expense. Term loans can be short-term, with repayments ranging from a few months to more than a year, to longer term loans, which span several years. Buy equipment, advertise, fund improvements and more.
If you’ve been denied for a bank loan but are still seeking a loan with competitive rates and terms, a Small Business Administration (SBA) loan is an alternative. These loans are partially guaranteed by the government, so they pose less risk for lenders if a borrower defaults.
Working Capital Loan
Many types of short-term financing options fall under the term “working capital loan,” also known as a “bridge loan.” These loans help business owners bridge gaps of capital to pay for everyday operating expenses, such as payroll and rent.
Merchant Cash Advance
Many alternative lenders offer merchant cash advances, which are funding options available to business owners who need capital fast and have less-than-perfect credit. Funds could be issued as fast as 1 day of approval. Offers typically require daily payments. Financing costs, known as factor rates, are also greater.