Many businesses find themselves experiencing a financial shortfall during the winter months. Whether it’s because business is slower during the winter or because the annual budget has been expended, small business owners may find themselves looking for small business loans. And this isn’t necessarily a problem — unless a business owner procrastinates. Failure to procure funding for the lean winter months can lead to having to rely on more expensive business financing options. Here are some ways that business owners can find funding as soon as possible to keep their business going.
The first step towards protecting your working capital is to ensure that you have an adequate picture of it. Before the end of the year, prepare your books and project the next few months out — this will tell you exactly how much of a financial shortfall that you will need to recover from. You will also need to know how quickly you will recover so that you can tell how quickly you’ll be able to pay back any business financing you acquire.
Once you’ve identified your financial shortfall, it’s time for businesses with leaner winter months to reduce their expenditures. By cutting back on hours and reducing overhead, business owners may be able to maintain better cash flow. Businesses may also want to forego planned, but unnecessary expenses, such as the purchase of new equipment — or they may consider financing items rather than purchasing them outright.
There are many lending options for small businesses depending on the company’s needs. Some companies need the long-term cash infusion of an investor, while other businesses need short-term cash infusions to get through the slow months. For the most part, businesses that struggle primarily in winter will simply need short-term funds to get them back to their more productive times of the year. The type of loan that is best for a business will be decided on by two factors: 1) what the business can qualify for, and 2) the terms of the loan. Business owners shouldn’t assume that they can’t qualify for a loan simply because their business is new or because their company’s credit score is low. There are often still alternative lending options available.
Ideally, companies should stagger their loans so that they acquire their cash infusion during their first monthly shortfall. If they will not make as much in January as they usually do, they should acquire their first loan in January. This static cash flow is what will prevent business disruption. Otherwise, companies may find themselves with greater expenses down the line. A missed rental payment in January could lead to fees and fines that will impact February.
Will your business need an infusion of working capital this year? We offer short-term working capital loans for credit scores all the way down to 500! All we need is your finished application and bank statements. If you have questions on working capital, call us immediately at 740-917-4960.