Despite the drastic difference in equipment, the maritime shipping industry is plagued by the same challenges as plenty of conventional small businesses. It is known as a “risky” industry, thanks to the increasing volatility of ocean freight rates. Changes in the global economy as well as the amount of ships being built can have a major effect on demand and earnings.
But despite the decrease in rates, orders have reportedly remained the same.
Having less cash makes it very difficult to repair equipment, which is very common in any shipping-related industry. Rough seas, reduced visibility, and unfamiliar ports can damage sea vessels and docks unexpectedly.
Maritime shipping businesses must be heavily capitalized all throughout the year in order to handle the large-scale cash flow that takes place on a constant basis. And since there’s already so much structural overcapacity, swift repairs are likely more beneficial to the industry than more equipment. This is just one of several elements that needs to become more efficient in order to reduce the impact of unstable rates and diminished returns.
For most businesses, increased efficiency means immediate access to working capital for maintaining operations and doing more business overall.
United Capital Source has many years of experience providing Small Business Loans for Maritime Shipping Services. We can provide all types of business lending products. Contact us today for your FREE business funding consultation!
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Advertise YourMaritime shipping businesses traditionally relied on bank loans to adapt to market conditions. But the industry has only become more unstable in recent years, with more and more external factors having an influence on rates. This has made banks tighten their requirements for maritime shipping business loans. And even if approval is granted, the terms are highly restrictive since they reflect the bank’s concerns with drawing a quick profit.
United Capital Source, however, has worked with countless businesses that are frequently prone to unstable cash flow. Like maritime shipping companies, many of these businesses have issues with compensation due to economic changes, inclement weather, and other uncontrollable events. But looming uncertainties have never stopped United Capital Source from giving our clients the terms and loan options that make sense for their financial cycles.
Whether you need extra working capital to stay current on supplier payments or a larger, business term loan to make repairs, we can develop a payment structure that accounts for industry-wide fluctuations in expenses.
One of our maritime shipping clients operates from a container ship facility at the container ship facility at the Port Newark — Elizabeth Marine Terminal in Newark Bay, New Jersey. Recently, the client contacted us about a dock that needed immediate repairs. A high tide and morning fog caused a container ship to damage the dock, where an international ship was mooring.
Since our finance team is well-versed in maritime shipping fundamentals, we knew that we could not fix the problem effectively without visiting the maritime shipping merchant in New Jersey. After reviewing the quotes to repair the property as well as the business’ future orders and accounts receivables, a small business loan was quickly approved and distributed. The client was able to repair the dock and allow freight ships to continue making and receiving deliveries. Apply now to see how much you qualify for!
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