5 Reasons a Business Might Need a Loan
Being a business owner can be very rewarding at times, but it also comes with an array of unforeseen challenges. Depending on the severity of the issue you are facing, a single unexpected expense could potentially jeopardize the future of your business. As a small business owner, you most likely have a contingency plan in place that leaves some breathing room for the occasional cash emergency, but no plan is 100% foolproof. Regardless of what you think you are prepared for, the world of business is guaranteed to surprise you.
Besides the normal operational expenses and emergencies you have to prepare for, you must also take into consideration the nearly infinite outside forces that could affect your bottom line. If your profits are down, you certainly aren’t alone. Today, the financial pressure many people are facing is unprecedented. Despite Wall Street showing record profits, salaries are stagnant and the cost of living is steadily increasing. People aren’t spending as much because they simply don’t have the money.
Revenue Based Funding
If your business has seemed to hit the wall profit wise, and you are considering your options for getting the liquid capital you need to get things back on track, revenue based funding could be the right option for you. Depending on the age of your business and your annual revenue, you could qualify for amounts up to $500,000 in as little as 24 hours. The cash you receive from revenue based funding can be used in any way you see fit, including the following common reasons many small businesses need extra cash.
If you are in sales, then it is important that you have enough inventory available to make a profit, fill any outstanding orders, and keep your shelves stocked. When inventory is low, your business is unable to provide the public with what they need, which means you lose a sale, a customer and your profit. It is import to keep your clientele satisfied, and that means being able to supply their needs.
Repairs and Upgrades
At one time or another, you may have to invest in a repair or two. Presentation is essential in any business, whether you have a brick and mortar store or an online company. If your business does not have a professional and legitimate appearance, that can cause you to lose business.
For example, if you are in the food industry it is essential that your establishment is kept clean and up to health code. The backbone of any successful dining establishment hinges on presentation, which includes so much more than the finished product on the plate. Proper maintenance of prep areas, equipment, walk-ins and the dining area are all integral parts of the overall experience.
Perhaps your business is experiencing a certain amount of success, and you are looking to expand or even open a second location. This is a critical juncture for many businesses, and not capitalizing on the momentum of your achievement when the time is right could mean an opportunity lost for good. This is the type of scenario that is actually ideal for revenue based funding, as it provides you with the capital you need now based on your future success.
Are you understaffed? Bring aboard new staff members can be costly, but as your business grows, so do your staffing needs. Paying an excessive amount of overtime to your employees can hurt your business; not only are you incurring the cost of higher payroll costs, but you are risking losing valuable experienced employees to burnout. It is a fact that people are more productive when they have a healthy balance between work and life.
Purchasing Seasonal Items
If your business is more of a seasonal operation, then you may not have the working capital to make essential purchases or repairs as your peak sales period approaches. When that happens, the money from revenue based funding could keep you in the game until your accounts are back in the black.