One of the important requirements for running a small business is you should always be cash ready. The fluxing economic climate is making things more unpredictable and difficult. Maybe you want to purchase supplies; new equipment or hire new staff, family office, but funds should be always available.
Funds availability is necessary to keep the business efficient and running.
Do you know?
As per the 2016 reports from smallbiztrends, more than 50% of small businesses fail in the first four years and 30% of small businesses are continually losing their money.
The point is not about losing money. If you are running a business, the process becomes a part of the cycle. However, small business owners should make sure that the loss is not completely affecting their probabilities of growing their business.
Either your cash reserve should be good or the sources for funds availability should be easily accessible.
Normally, when a small business owner looks for sources for arranging funds for his business, then the first thing that comes to his mind is taking a small business loan.
Now, this is something important.
If you have something that requires you to make an upfront investment and you are planning to take a small business loan, then it’s not a good option. You’ll spend most of your time chasing behind that money just because you want good credit terms and other benefits.
Taking a small business loan is definitely the most suitable option if you have all the criteria to qualify for the same. Otherwise, it’s a waste of time.
Nowadays, you’ll find many online lenders, who provide funds with fewer obligations. It’s important to note that the online lending programs are non-banking services. They overlook most of the things that traditional loan providers focus on.
For instance, online lenders do not look into how much business you are making or how much profit you are earning. Their loan lending programs are very flexible.
- You need not provide collateral.
- You need not have good cash flow.
- Your credit score doesn’t matter to them.
It is easy getting cash through funds availability program/services and you’ll access your money on the same day.
Get all the checks payable to your business like money orders, cashier’s checks, business checks, and even personal checks. Deposit them in the online lending centers and get immediate cash.
It’s not possible to get such a degree of convenience while taking a bank loan. You have to first qualify a certain number of pre-requisites and then wait for few business days before you can have your money.
There are a lot of benefits of taking funds availability service and getting cash/funds immediately gives a small business owner, the power of purchasing.
Here’s a list of advantages of having immediate funds.
How will Funds Availability help Small Businesses?
Upgrading the Inventory
Your inventory is an integral part of your business because there are a lot of things that are tied with this term.
Suppose you do seasonal business, then you have to make sure that all the products are available for every customer, under every circumstance. Let’s take Christmas time. Like any other businessman, even you have put a good number of deals and offers to attract customers. And when they want to buy a product, but are disappointed with ‘OUT OF STOCK’ message, then it’s not a good sign.
Maybe it doesn’t make a much difference if one customer leaves with an empty hand. But if it happens to 10 or more customers, it will cause a domino effect. Customers will give you a bad feedback and this is bad for your business reputation.
Having quick funds will help you update your inventory and help you avoid all this.
Managing Working Capital Gap
The working capital gap is not having the cash to spend on daily business expenses. This looks harmless, but it is something that can get you out of business. Also, there are many reasons that constitute working capital gap.
In simple words, if the cash going out is greater than cash coming in, then it is working capital gap. Whatever may be the reason; there are a lot of drawbacks associated with it and each one of them can impact your business growth.
Under such circumstances, if funds are available immediately, then you can keep a check on any such instance that can impact your business growth.
Pay Taxes & Other Bills
Your financial obligations do not just stop at purchasing inventory. You have to pay bills, taxes, employee salary, and much more. These things are menial but are crucial for running a business.
If you don’t pay the tax within the deadline, then it’ll more burden paying the fine. In addition to that, when you don’t pay your vendors/suppliers then you’ll not get raw materials for your business operations.
But with good cash flow, it’s easier to manage all these challenges and run your business efficiently. Paying on time, you can negotiate better terms with your suppliers in bad days and maintain a smooth workflow.
The fund availability service is particularly advantageous than taking a bank loan. You’ll not spend your precious business days scrambling around for money.