How To Leverage Short-Term Financing
Small businesses all have one thing in common, they all experience periods of unpredictability. What a large corporation sees as a speed bump, a small business sees as a sinkhole. Because it is difficult for small businesses to keep large amounts of cash on hand; short-term financing options give them the ability to get the funds they need when they need them.
What can I use Short Term Financing for?
1. To Manage Cash Flow Gaps
If your business is seasonal or follows similar patterns, you can use short-term financing to boost your cash flow during slowdowns. A Merchant Cash Advance is the perfect product for these types of business. Repayment works alongside your cash flow, it’s based on a percentage of sales model. If you process $0 of sales in a given day, you won’t have to make a payment. When business is strong, you’ll pay back a higher dollar amount.
2. In Emergency Situations
Emergencies happen – floods, equipment malfunctions, and repairs can pop up at any given moment. When addressing the issue puts too much strain on your cash flow, short-term financing can be the solution. One difference between its longer-term counterpart is the speed the funding can be completed. As time is crucial in emergency situations, getting funded in as little as 48 hours can be the deal breaker.
3. To take advantage of special discounts
Stocking up on inventory through a promotion is a great way to boost your bottom line. It’s not always as easy as it sounds, you need to have the cash on hand. When the savings outweigh the cost of borrowing, a Small Business Loan is a great option.
4. To run a marketing campaign
Promotions are a timing game, regardless if you are taking advantage of them or running them yourself. When the timing is right, a marketing campaign can be a great way to bring in additional business. Once again, it is all about weighing the pros and the cons. If you are comfortable taking on debt knowing the outcome will benefit you, you should consider the short-term financing options available to you.
Where do I look for Short-Term Financing?
If you have a line of credit available to you at your bank, you should start there. However, if you need to apply for one, or a tradition loan through a bank, you’re in for a long process. When you need funds fast and the banks don’t meet your needs, it’s time to look at alternative lenders. Evolocity Financial Group is a leader in the Canadian lending space, offering both Merchant Cash Advances and Business Loans. You can learn more about the products at Evolocity.ca.
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