Asset-based funding may not be the first thing you think of when you need funds to grow your business, and it probably shouldn’t be. However, asset based fund can really be a great tool to help your business grow and expand, especially if more traditional options are not available.
Take Advantage of Discounts
A business credit card or small business line of credit is great for ordering inventory in bulk, especially if you can get a good discount by doing so. What if a supplier is having a huge sale and buying popular products for your inventory at rock bottom prices would double your profit? Even rock bottom prices are not free, and cash is not always available for such purchases. If there is no business credit card or line of credit, what other options do you have? Are you out of luck? A traditional loan would take too long to be a realistic, reasonable option for this type of purchase. However, a merchant cash advance could be the answer. Application is quick and easy, credit score is rarely a factor, and the funds could be in your account in as little as 48 hours. In addition, it is likely the repayment terms could be a percentage of sales, which may take off once you have a full stock of the popular inventory.
Cash Flow Gaps from Collections Issues
Reinvesting profits in the business is a must for growing and expanding. However, bills and debt obligations must be covered. Broken equipment must be fixed. Storefronts must be kept looking presentable. Running a business is expensive, and it is easy to get so caught up in staying afloat that the cash to grow is never there. This is often due to aging receivables. If invoices are not collected within 30 days, and there is a large amount in the 90 days and older column, you may have great sales but not the cash to run your business. Receivables factoring can help with this. By selling your receivables at a discount, you immediately boost your cash flow and allow yourself to move on with running and actually growing your business. This is a short-term solution however. It may be wise to reconsider payment options for your own customers, and maybe offer an incentive for early payment if you are not already.
Meet Growing Demand
Growing demand often means prime opportunity for a business to grow. Increasing inventory, staff hours, and even space are all appropriate responses to growing demand. This all costs money. Ordering extra inventory, paying increased staff for longer hours, paying higher utility bills due to being open longer hours, and paying to add more tables or add on to existing space all costs. If demand is growing then the costs should easily be covered with increased profit, but profit will not increase without meeting the demand. Asset based funding in the form of a merchant cash advance could be useful in this situation also, if used properly.
Whatever type of financing you need, Biz2Credit can help you find it. Our extensive network of lenders offers all type of small business lending options. We can help you find a lender that has exactly what you need. Visit Biz2Credit today to get started.