Finance & Lending


04 21 2017

Alternative lending benefits small businesses

04 21 2017

3 Alternative Lending Situations That Benefit Small Businesses

Businesses strive to be different from one another. Whether its your products, your customer service or your convenience, you have at least one feature that’s your differentiator. But no matter how hard you try, there’ll always be one thing every business has in common: A need for money.

Cash is the lifeblood that powers your company. However, there are times when funds seem to be just out of reach. During those periods, you know you need to find a solution, but what that might be isn’t always clear. The answer to your financial frustrations might be closer than you think.

An alternative lender can provide funds when you need them most to help you keep your company moving forward.

Here are three situations many businesses face that an alternative lender can help manage.

1. Reluctant accounts receivable

It’s an easy assumption that success comes from making sales. As anyone who’s struggled to collect on an account knows, though, this is only one step on the path to profit. According to a survey from Wasp Barcode Technologies, 51 percent of small business respondents said accounts receivable and collections are the biggest accounting issues they face.

Failing to receive funds is frustrating. Not only is the relationship with your debtor damaged, but those funds were likely necessary for another function in your business. While you hunt down that payment, your progress might be on hold.

An alternative lender can help with this headache by granting a short-term loan, enabling you to proceed with business as usual without holdups.

2. Expensive expansions

Much like a child will outgrow his or her clothes sooner or later, a growing business will eventually need to move into a bigger space or market. Whether you’re trying to move to a bigger building, offer your products to a bigger audience or hire a bigger staff, you’ll need capital to make the expansion happen.

Vinny Antonio, the president of Florida-based Victory Marketing Agency, told Forbes that cash flow management can be one of the biggest challenges when growing a business.

“Cash flow management for a rapidly growing, bootstrapped company can be harder than the world’s most difficult Sudoku puzzle,” Antonia said. “It’s almost a full-time job staying on top of who owes you what and who you owe, and then prioritizing those payments. All the while, you’re pushing for more growth, but with that comes additional expenses — most notably, your executive team. Good talent doesn’t come cheap, and you often have to find creative ways to lure the right personnel to your team.”

What’s really frustrating about cash flow issues during high growth is the fact that you know you’ll be making more money soon – but you need that cash now. An alternative lender is the perfect solution to this problem. Since you can show your plans for growth, an alternative lender will likely be happy to help out.

3. Stocking up for the season

As a business owner, you know what your sales cycle looks like. Florists know their busy season is in the summer when brides-to-be are getting ready for their big days. Toy retailers know that, come November, they had better have all the latest gadgets on their shelves so parents can load up on holiday gifts early.

Whenever your business’s busy season is, you know you need to invest in your inventory ahead of time. But, following a slow-selling month or two, you may lack the funds to accomplish that. Lack of cash on hand shouldn’t keep you from getting ready for your most profitable season.

An alternative lender can step in so you can make sure you’re all stocked up. A short-term loan to fill your shelves or warehouse with soon-to-be high demand items can give you a jumpstart to your busy season.

Every business owner will encounter tricky situations when managing their company. Sometimes, extra cash is enough to help you safely navigate these obstacles. Alternative lenders can grant businesses the financing they need, so they can carry on with their entrepreneurial endeavors without being held up by lack of funds.


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