Running a small business is quite challenging when you look at the endless expenses that have to be managed, irrespective of your financial situation. Beginning with establishment costs such as rent of the premises, electricity, water, house-keeping, wages of employees, equipment repair or replacement, transport and logistics, and a lot more. It all depends on the kind of work that you do and the products or services you offer to your customers. Small businesses go through periods of boom time and bad time but the cash flow situation depends on the nature of your business. During uncertain times, you need business capital loans to tide over cash shortfalls or make investments for growth but it’s difficult to get loans from traditional lenders.
Small retail business funding by alternative lenders
If you are in retail, you get your payments upfront but in all other businesses, it takes days if not months. Still, you need cash for expanding your inventory because you need to have stock of goods that are in demand or are trending. Your customers should never get the impression that you never seem to have the things in your inventory that they want.
Small retail businesses cannot afford to be vertically-aligned in terms of what you have in your inventory. Hence, you would like to maintain a horizontal format with a large assortment of products meeting different kinds of needs. The demand for such products could be seasonal or throughout the year and to meet this demand, you will need fast and easy cash advances.
Funding for small manufacturing businesses
If you are running a small manufacturing business you would know how difficult it is to have a steady cash flow throughout the year. Even if you have a captive market with customers who have entered into long term supply agreements with you, the billing cycle will be phased with enough scope for delays and disruptions.
In your manufacturing plant, there are workers whose wages have to be paid on time and there is expensive capital equipment that need to be in great shape to ensure great output. That is possible with regular servicing of the equipment, which cost a fair amount of money. Whether you need short term cash advances for meeting working capital needs or longer term loans to procure capital equipment, your best bet is alternative business funding.
Alternative lending for small contractor firms
In the construction industry, small contractors are those who execute the real work on the ground and for that they need to operate big and costly machinery and equipment. It requires a lot of money to pay the wages of operators of such equipment and other employees as well as servicing and replacement of the equipment.
The cash flow of your contractor firm is not stable as you get paid in 60-120 days after raising the invoice for a completed project. When you need quick cash to meet working capital or equipment repair work, you can leverage your invoice to obtain quick loans. This happens via invoice factoring, wherein the value of your invoice is hedged to provide you the loan.