Auto repair shops are by definition, faced with a fairly common but highly-stressful financial dilemma: They must maintain a budget to cover rising expenses throughout the year while spending a great deal of money on projects that allow them to stay competitive and evolve. You could even say that cash flow problems are merely an indication of a healthy, up-to-date auto repair shop constantly looking to build clientele.
Keeping existing customers is very important as well considering so many of them continue to give their business to smaller shops primarily because of the personal relationship they share with the business owner. If auto repair shops fail to maintain customer loyalty and trust, they risk losing their business to the always-accessible national chains.
Alternative business lenders like United Capital Source admire the sacrifices made by auto repair shops and are honored to return the favor by smoothing their financial cycles so that business owners can devote 100% of their focus to the jobs at hand.
Big Sacrifice, Bigger Reward
Like other service-based industries, auto repair shops must spend money to make money and the more money they spend, the longer they have to wait to get paid. Large-scale auto projects can take months to complete, often because the shop must order parts costing tens of thousands of dollars. Such projects are time-sensitive, meaning the parts must be ordered as soon as possible in order for the work to be completed by a specific date. And high-end parts are, of course, far more complicated to order than conventional parts.
You can just imagine how cash-strapped an auto repair shop would be when presented with multiple large-scale projects capable of tying up 75% of the shop’s assets in inventory. But no auto repair shop can survive without offering affordable prices, discounts for loyal customers and free services like oil changes. Consecutive projects are necessary to cover expenses and keep prices low.
Snow On The Tracks
Another stressful aspect of the auto industry is seasonality, or the fluctuation of revenue during different times of the year. Virtually all businesses have slow and busy seasons, the latter of which must be taken full advantage of to balance out finances for the year. Preparing for the busy season wouldn’t be an issue if it didn’t have to get done during the slow season, when money is so tight that businesses can barely afford to pay their bills let alone order excessive inventory. Taking on certain projects can be daunting if the slow season is on the horizon.
Trial And Error
One client of United Capital Source went to his bank for a small business loan but quickly became overwhelmed by the tediousness of the application process. He didn’t have time to compile mountains of paperwork and couldn’t afford to wait several months just to learn whether or not he had been approved. It would have taken even longer to receive funding, regardless of how quickly he needed it. After a quick phone call with UCS, the client was assured that he would be able to survive the slow season while keeping costs low and continuing to offer discounts. Most of his funds were tied up in inventory, rendering him unable to cover regular expenses until the work was done.
We've Been Down This Road Before
Applying for business funding at UCS takes just a few minutes, requiring you to gather a minimal list of financial documents. Funding can reach your bank account in a matter of days, which is a major advantage for auto shops that need to order massive amounts of inventory in a rigid time frame or cover monthly expenses during the slow season. Various auto repair clients of UCS have conquered the slow season or gained the means to take on numerous expensive projects simultaneously via a Merchant Cash Advance, or credit card processing loans.
This program gets you working capital today for a percentage of future credit card sales. You could cover your expenses without having to worry about obstructing cash flow even further with fixed, monthly payments that would otherwise begin immediately after funding is distributed. The majority of the balance is instead paid off when credit card sales are up, and this won’t be difficult for auto repair shops because most of their sales transactions are conducted via credit card.
With a Merchant Cash Advance, you gain the ability to run and grow your business at the same time. You don’t have to turn down projects, raise prices, or dig into operational or personal funding to keep your business afloat when you’re low on cash. The only thing you need to do to pay back the debt without trouble is continue to attract customers, and if you weren’t doing this already, you wouldn’t even need a small business loan in the first place.
A Long-Term Partnership You Can Trust
You’re probably thinking to yourself: If I take out a small business loan to get me through this one hiccup, what will I do when it happens again? At UCS, we strive to forge long-term relationships with clients that do not end once their debt is paid back. Many of our clients take out small business loans on a cyclical basis, growing their businesses even more significantly each time. We want you to take on even larger projects and offer even better prices, and we're prepared to guide you every step of the way. If your customers have put their trust in you, there's a good chance we won't hesitate to do the same!