Nobody faces more challenges on a daily basis than small business owners. In fact, for owners of family owned local business, handling many different challenges is the source of great satisfaction and some headaches, too.
But when business owners are asked to name their greatest challenge, one thing tends to top the list most often; accessing working capital to manage cash flow. In other words, making sure there is enough capital flowing in to cover everything that needs to flow out.
There are a variety of reasons why cash flow can be a steep challenge for small business owners. Needs can precede revenue. Or perhaps you’re getting paid more slowly than you’d like. Or if you’re a seasonal business, a garden center, for example, or specialize in hardy, cold weather clothing and you have peak sales months which require that revenue to stretch across your off-season months.
Often, business owners can optimize cash flow by negotiating longer payment cycles with creditors and encouraging debtors to pay in shorter time periods. But there are other solutions that can help you sail through the lean months with plenty of working capital on hand: a short term business loan, cash flow loan or merchant cash advance.
You can put small business financing from LVRG “to work” immediately for your business, whether it means meeting payroll for a few months, negotiating a great deal on inventory for paying in cash or hiring and training those new employees you need. Our business financing solutions can help you operate without missing a beat or even take advantage of an unexpected or one time business opportunity.
Some of the common reasons a business owner will seek financing are:
- The purchasing of equipment in order to grow the existing business or the purchase of stock to expand the business
- Improving the business’ credit by allowing the owner to pay off other loans
- Marketing the business via a specifically designed campaign
- Renovating the premises or expand them in order to raise the business’ current earning potential
- Purchasing new property for the business to expand to
- Staving off financial stagnation during periods of slow business
Benefits of revenue based financing and cash flow loans:
In addition to the much easier method of obtaining working capital from LVRG, as opposed to a bank, revenue based financing, cash flow loans and merchant cash advances have a lot of incentives when it comes to small business financing:
- Much quicker approval times from LVRG as opposed to a bank. This translates to faster cash-in-hand, allowing you to take advantage of current market prices.
- Whereas business loans require you to have collateral in order to gain favorable consideration, a revenue based loans or MCA simply requires you to be subject to a limited amount of conditions.
- A cash flow loan or merchant cash advance is also much more beneficial to the cash flow of a company since it does not require any monthly payments or upfront fees that are characteristic of loans.
- There is no limitation on how the funds acquired from a cash flow loan or MCA can be used. Funds that are loaned through a financial institution must be used for the stated purpose by the business. As a result, money from a business loan has a very narrow scope of action as compared to money that comes from a cash advance.
- No worries about points of upfront fees.
And then there are those costs that no business owner sees coming. The sudden need to replace an important piece of equipment or the need to upgrade technology to improve efficiency and save money in the long run. Repairs, sprucing up the exterior, landscaping, even marketing and advertising can all be critical elements to your brand and your ability to growth the business. In today’s super competitive environment, this is no time to skimp, especially when applying for business funding. Have questions? We've got answers!