New small business owners have a lot on their minds. With many small businesses closing every year, they don’t want to be another statistic. From marketing and product development to hiring and training employees, they’re always looking to take advantage of new business opportunities and help their company grow.
Unfortunately, many such small business owners get into trouble when they lose sight of their existing business. They ignore certain red flags until it’s too late. A reason for this is the anxiety associated with seeking additional funding from a traditional funder.
Traditional funders such as banks aren’t in the business of taking risks. Small businesses can struggle to get additional funding from them unless they have a strong cash flow, years of profitability, or can offer collateral.
Instead, such small businesses should take advantage of unconventional small business funding options from online lenders that can quickly provide funds with reasonable terms, short application processing times, and high approval rates. Such alternative funders can prove to be a lifeline in the following situations:
#1 Low Cash Flow
Most small businesses close because they’re unable to manage their cash flow. Even if a small business has a strong forecast of sales, unexpected cash flow problems can bring them to a halt like a roadblock does to a speeding car.
A merchant cash advance (MCA) from an online lender can be a good solution to temporary cash for problems. This is an unregulated fixed loan based on a business’s potential that requires no credit checks. However, businesses applying for this funding should read all terms carefully or they can get caught in debt traps from predatory funders that offer astronomical interest rates.
#2 Payroll Problems
Making payroll can be one of the most stressful problems for a small business owner. When the payday rolls around and there’s not enough money in the bank to pay salaries, small business owners can run into a crisis.
Not only is it difficult to look unpaid jobholders in the eye, but payroll problems can result in a high employee turnover rate. This can be a death blow for a small business that has invested time and money in training its valuable employees.
A small business that has temporary problems paying its employees can take advantage of a bridge loan from a reputable online funder. This short-term funding can bridge the gap between funding from traditional funders like banks. It’s an excellent option for small businesses that don’t have enough working capital to satisfy day to day operations such as paying rent, utility bills, or salaries.
#3 Putting Off Maintenance
Small businesses that are running low on funds often delay expenditures until their bank balance improves. They can get into trouble if these are maintenance, repair, or upkeep expenditures. If equipment breaks down due to negligence, then it can affect revenue and can lead to serious liability concerns.
Instead of putting off maintenance, a small business should take advantage of small short-term loans from an online funder and pay them off quickly to build their business’s credit. These are just some of the signs that a small business needs additional funding. Ignoring them can adversely affect the lifespan of any business.