A thriving business benefits from a large percentage of positive working capital. Somewhere between profits and liabilities, this enables a small business to continue to invest in future growth. Yet, it’s common for a small business owner to have trouble understanding this concept. Most don’t have a good idea where the business stands. The Small Business Administration advises that working capital has a direct influence on a company’s ability to pay its debts and to remain financially viable. Small business loans can support this goal by providing an extra source of income when liabilities and assets don’t balance out well.
THE SIGNS WHEN WORKING CAPITAL IS HELPING YOUR BUSINESS
If you’ve been so wrapped up in trying to promote your business offerings, perhaps you haven’t had a chance to really sit down and strategize how you can increase working capital going into 2017? Taking out a working capital loan may be an option, but you are not sure how it can go to work for your business over the long term. What are the signs that a working capital loan is actually improving your bottom line?
FUNDS ARE AVAILABLE TO PAY EMPLOYEES
The lifeblood of every small business is its people. Hiring and maintaining the best team takes a great deal of working capital to fund payroll, benefits, and more. An Entrepreneur article details how to calculate the necessary working capital needed to fund payroll. With an ongoing source of additional working capital through a small business loan, the worry about not being able to pay employees on time is a thing of the past. Working capital loans can be used for all areas of employee support.
MONEY FOR TAKING ON NEW PROJECTS IS READY
Imagine being approached by a prospect about a large project that could help your company develop a new line of business or improve existing services? For many companies, this could be a dream come true – a crossroads that can determine the future. But what if this commitment requires an expensive upgrade of equipment and hiring more people? Working capital set aside for this purpose can make it possible to take on a new project and a great new client quickly and efficiently.
EXPANSION STARTS TO SEEM MORE FEASIBLE
Every small business reaches certain milestones when it can choose to expand or keep moving along the same path. The National Small Business Association (NSBA) conducted a study that indicated “53% of small business owners did not have the needed capital to fund a business expansion or grow their business”. Working capital loans are ideal for expansions. When working capital is a factor in directing the growth of a company, taking out the additional funds to make strategic decisions makes the best sense. This is opposed to simply reacting to market changes and then panicking trying to raise the capital.
RECEIVABLES ARE NO LONGER A PROBLEM AREA
When working capital is used properly, it can also help to improve the way any small business manages receivables. Typically, small business owners deal with clients paying anywhere from 15 to as much as 90 days out. This can be challenging to manage, particularly when payments are slowly trickling in, but expenses are piling up. Many small business owners find themselves trapped by high interest credit card advances. Working capital loans, however, can provide the buffer between profitability and disaster. Receivables can be managed because there is a ready supply of cash to cover things and flexible repayment terms that work within receivable terms.
CUSTOMER NEEDS CAN BE MET MORE FREQUENTLY
Every small business owner is dedicated to creating happy and loyal customers. Working capital loans can be helpful towards this goal because there is no hesitation to take on new types of work and offering new services on demand. New ventures require capital upfront for developing ideas, investing in materials, hiring new people, and marketing them. Each industry is different, but a business can experience cash flow issues in the initial stages of any new business offering. When money is no longer an obstacle, the sky is the limit in terms of what a small business can offer to satisfy customer needs before they head for the competition.
DON’T HAVE TO WORRY ABOUT CREDIT SCORES OR BANK LOANS
In the previously mentioned NSBA survey, 38% of small businesses had felt mistreated by their bank and nearly one in ten lenders had had their loan recalled prematurely. Many more had been denied funding because of lower credit scores or changing rules concerning lending to small businesses. Thanks to companies like United Capital Source, which offers access to working capital loans for businesses that have been turned down by banks, a small business owner going this route doesn’t have to worry as much about less than perfect credit.
TAXES AND UNEXPECTED COSTS DON’T KEEP YOU UP AT NIGHT
Perhaps the biggest sign that working capital loans are helping support the goals of a small business is that the owner isn’t losing sleep over financial worries. It takes a great deal of money to keep a business going and far too many small business owners resort to poor money choices because they are connected by the heart to their business. For example, using their own personal savings or putting up a home as collateral when an emergency expense occurs– these happen more than small business owners are willing to admit. Working capital and other small business loans take at least some of the worry out of maintaining a strong business.
Find out how working capital loans can support your small business by reading through the many success stories that United Capital Source has to share. The application is free and easy, and there are multiple options to choose from should you decide this is for you.