Whether it’s to survive shortfalls or accelerate growth, access to capital can be critical to small business success. Access to capital can help small businesses grow by giving them the means to purchase new equipment or supplies, upgrade technology and expand facilities, all of which can also lead to increased hiring. And managing that business capital in a positive way impacts the terms and availability of the financing available to fund that growth.
Securing capital is something that comes in time with virtually every business, whether it's in the initial exhilarating stages of transforming an idea into a company or later on, once operations begin to normalize. Generating the amount of liquid cash necessary to scale appropriately, build inventory, or expand marketing efforts can be a challenge for businesses of any size, making additional cash flow a significant benefit.
Access to capital can help small businesses ensure a positive cash flow by securing financing at better terms and getting that financing when it's needed to take advantage of immediate business opportunities. Conversely, businesses with poor credit ratings may face higher credit card and interest rates from lenders. Indeed, insufficient or delayed financing is the second-most-common reason for business failure, reports the SBA.
Access to capital can also help small businesses avoid cash shortfalls, whether they’re due to slow business, natural disasters or daily operations and to stay afloat when times are tough. Enough income to sustain a company on a day to day basis is an important part of keeping a business going, but in many cases, it's not enough. Appropriate cash flow goes beyond the bare minimum; there's significant value in having the funds available to take advantage of special opportunities, whether that means purchasing additional inventory for a special purchase order, or getting in on the ground floor of a profitable investment. With capital, every opportunity is available.
Small businesses should perform periodic checks of their credit reports and scores. Any errors should be challenged immediately with the appropriate credit bureau, reports Intuit’s Small Business Blog.
Companies with less-than-perfect credit aren't necessarily blown out of the water. If a credit report contains an issue that is factually correct but negative, business owners can try negotiating directly with the creditor for a lower balance, an extended repayment schedule or removal of the item in question in exchange for immediate payment in full.
Small-business owners should also analyze their credit reports for information that can be seen as credit weaknesses by potential lenders, such as high balances relative to credit limits and too many open accounts.
Whether it’s to help a company weather tough economic situations or to take advantage of growth opportunities when times are good, access to capital can be a critical component of any small-business success.
When handled correctly, a business loan can be a very personalized, carefully crafted undertaking. An all-purpose, one size fits all loan is only an asset in very particular circumstances, but a customized lending process has the ability to create a solution that is very specific to your needs. With the ability to evaluate specific requirements, from loan terms to principal amount, interest rate to repayment schedules, a business loan can open doors for you that were previously closed and locked.
In some cases, access to capital is a great way to take advantage of new opportunities. In others, however, it can be a good way to pull a struggling company out of a pit of poor circumstances. Despite the potential for risk, capital can be the saving grace when trouble comes to call, providing the means to bridge the gap between failure and success. A few extra dollars today may mean an empire tomorrow, and can be the necessary protection against closing up for good.
A business loan, whether for a few thousand dollars or a few million, can make previously unavailable opportunities obtainable, providing a customized solution in a time of need and keeping the lights on even when the going gets rough. With ready access to business capital, the possibilities are literally limitless, offering the assets you need to promote a positive trajectory and inspire healthy growth.
There are numerous reasons a business owner might choose to borrow, but here are some situations where a short-term cash flow loan could make the most sense:
Overcoming a short-term seasonal cash flow bump: Many seasonal businesses require a little extra capital to meet expenses during a down time or before the busy season starts.
Unexpected expenses: It’s not uncommon for businesses to experience unexpected expenses like a major plumbing problem or other maintenance issue they might not have the cash flow to cover.
New project start-up costs: Ramping up for a new project or a new customer sometimes requires additional resources that might exceed a business’ ability to cover with cash flow, but will be recouped in 60 or 90 days.
An opportunity to purchase inventory at a steep discount: A temporary cash flow loan is a good way to take advantage of an opportunity to purchase inventory that has the potential to increase profits.
Emergency repairs to business-critical equipment: When equipment necessary to the operation of your business fails, it likely doesn’t make sense to wait several weeks to start repairs. A temporary cash flow loan can be a good way to access capital to start those repairs right away.
Although short-term, temporary cash flow financing is not appropriate for every business financing need, it may be a good fit for situations like those mentioned above. At these times, most business owners don’t have the luxury of weeks or months to find a business loan. Online lenders like LVRG are often able to provide fast approval (as quickly as a few minutes) and have money in your bank account as quickly as within 24 hours.
Here are 7 Small Business Loan Options for Every Stage of the Business Cycle:
Small Business Cash Flow Loan - Type of debt financing, generally for working capital, using the expected cash flows that a borrowing company generates as collateral for the loan. You’re essentially borrowing from cash that you expect to receive in the future by giving the lender the rights to a predetermined amount of these receivables. Get up to $2 Million in as little as 24 hours, regardless of credit! LEARN MORE
Small Business Expansion Loan - Designed for prime businesses with better risk profiles, our business expansion loan is an extended-term loan with rates ranging from 9.99% - 36%, terms of 18 to 24 months, multiple payment options, and loan sizes up to $250,000. It’s large-scale growth capital if you're looking to invest in bigger projects, with the same speed and simplicity LVRG is known for. GET STARTED
Small Business Line of Credit - A small business line of credit provides flexibility that a regular business loan doesn’t. With a small business line of credit, you can borrow up to $100,000 and pay interest only on the money borrowed. You then draw and repay funds as you wish, as long as you don’t exceed your credit limit. Need to manage cash flow? Buy inventory? Pay for a surprise expense? Then a business line of credit makes sense. LEARN MORE
Small Business Revenue Based Financing - Instead of a business being required to pay fixed interest payments like a typical bank loan, a revenue based loan is paid with a percentage of revenues. With loan amounts up to $2 Million dollars and funding in as little as 24 hours, it helps you grow your business and it does not saddle you down with long-term, highly encumbering debt. LEARN MORE
Small Business Term Loan - Small business term loans can get you the money you need to bridge cash flow gaps, handle emergencies and unexpected expenses or take advantage of a business opportunity. Funding amounts from $15,000 to $250,000 and terms of 3-24 months, a term loan from LVRG is small business capital for big business growth. LEARN MORE
Small Business Working Capital Loan - At any stage of growth, fast, flexible funding is essential to the continued success of your small business. Our working capital loans feature 6 to 18 month terms and fixed payment options to accommodate your specific needs, so you can focus on what you do best, running and building your business. LEARN MORE
Merchant Cash Advance - Unlike a loan, we provide you with business capital by purchasing a portion of your future receivables. Daily remittances are an agreed-upon percentage of your sales and are automatically deducted from your credit processor or bank account. Perfect for businesses with fluctuating revenue, the Merchant Cash Advance ensures that your remittances are always based on what you can afford, so you can grow, not just owe.
Fast And Flexible Funding
Our financing alternatives may also be the ideal solution for businesses with less than perfect credit. Best of all, you could have your funds in as little as little as 24 hours. The process is quick and easy and begins with an easy to complete application from you. We’ll take care of the rest.
We Know Small Business Finance
We understand the cash flow limitations that small business owners sometimes experience, including the unique challenges faced by seasonal business owners. We make temporary cash flow loans with the goal of helping small businesses grow. We offer lines of credit and cash flow loans that are based upon the overall health of your business rather than solely your personal credit score. Headquartered in Detroit's Historic Ford Building, LVRG Funding is a local funding firm dedicated to helping the local small business community thrive and grow. With a dedication to our clientele and a reputation for excellence, you'll understand why LVRG is such a respected member of Detroit's small business community. Give us a call today (855) 998-LVRG, we're here to help!