Managing your company's cash flow to avoid any short-term financial issues can be challenging no matter how long you’ve been in business. There are so many variables involved, many of which are out of your control. From consumer household spending to the timing of a customer payment, even the most successful company can face a cash crunch at some point.
Utilizing a working capital loan can be an effective way to keep your business afloat even if you’ve hit a slow spot for whatever reason. Here are three ways a working capital loan can help your business survive a cash crunch and even thrive in the process.
Carry Forward While Waiting on Customer Payments
Most businesses are all too familiar with the waiting game of customer invoices. It doesn’t matter if you sell a product or provide a service—customers are rarely worried about your schedule when it comes to making payments. Since this is an issue that definitely falls under things that are out of your control, you can use the funds from a working capital loan to get that control back in your hands. That way, you don’t have to worry about taking more drastic steps, like offering customers a discount simply for paying their invoices.
Keep Your Accounts Current
Getting a working capital loan can help you stay on top of your own payments to vendors and other professionals you work with. Rather than having to push back non-essential payments or negotiate longer payment terms, you can keep your obligations on track. Not only does this keep your vendors happy, but you also keep your business credit score intact. Then, when you’re ready to apply for any other kind of financing, whether it’s a small business loan or credit card, you can qualify for better rates and terms.
Track Your Cash Flow History
As your business continues to mature, track your cash flow history so that you can plan for your working capital needs in advance. We offer unsecured working capital loans that can put cash in your account in as little as 48 hours, but it can still be helpful to have an annual plan for your financing needs. Start looking at patterns throughout the year to determine when your cash shortages typically hit. That way, you know the right time to apply for a working capital loan for your business.
The Bottom Line
Don’t let a temporary cash flow issues burn out your business. Instead, get the help you need with an unsecured working capital loan!