Working capital is the day-to-day driver of every small business. When you have enough cash on hand, you can hire more, produce more, take on more jobs, and pay less for supplies.
Summit Financial Resources offers working capital loans for small to medium-sized businesses that involve using your accounts receivable and other assets as collateral. We can mix and match from a variety of product options to suit your needs, including invoice factoring, asset-based lending, inventory lending, and equipment financing.
Working capital loans can be used for any business expense, allowing small business owners to meet their short-term obligations and invest in long-term growth. Here are 10 ways to put a working capital loan to work for your business:
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1 – Managing Cash Flow
Even the most seasoned entrepreneur can experience cash flow problems. Small business owners often rely on working capital financing to help bridge the gap when there is a shortfall. Whether you need to meet payroll, keep the utilities running, or pay your lease or mortgage, working capital financing will help cover crucial operating expenses during times when your business experiences a cash flow crunch.
2 – Launching a Marketing Campaign
According to Facebook’s holiday shopping survey, one in five U.S. consumers will likely be making their first holiday purchases in October or earlier. Launching an “early bird” marketing campaign now will reconnect your business with current customers and attract new business. A working capital loan lets you capitalize on return-on-investment opportunities such as refreshing your online presence, testing a new advertising channel, or sponsoring a local holiday fundraising initiative.
3 – Updating Equipment
There is a lot at stake when it comes to purchasing or upgrading your equipment, especially if there are big-ticket items on your list. So if you’re offered a great deal on a “must-have” piece of equipment that will deliver long-term benefits for your business – but don’t have the cash to pay for it – having working capital financing in place can provide the funds you need to cover the cost without impacting your current cash flow.
4 – Paying Seasonal Expenses
Managing cash flow is crucial for any small business owner. If you are running a seasonal small business, cash flow issues can make it difficult to restock inventory and hire temporary employees before things get busy. Working capital loans are ideal for covering these expenses and helping to ensure sufficient cash flow during slower sales periods.
5 – Staffing and Employee Expenses
Providing stellar customer service is one of the keys to steady growth. If the fourth quarter is one of your busy seasons, a working capital loan can help you hire enough temporary employees to handle the year-end rush and keep your customers happy. Cash from working capital loans can also be used for human resources expenses such as career fairs, hiring bonuses, and employee events.
6 – Expansions or Renovations
Whether you need more space to attract more profits or want to remodel to provide a better customer experience, a working capital loan can fund projects that will support business growth. Use it to access quick cash now to repave your parking lot, add indoor seating for your restaurant, or upgrade your warehouse racking system before the onset of winter weather.
7 – Covering Unexpected Expenses
Savvy small business owners know to expect the unexpected. Problems such as equipment breakdowns, structural damage from fires or floods, or a sudden shift in the market can leave you strapped for cash. Because working capital loans can be used for any business expense, they can mean the difference between keeping your business up and running or closing your doors.
8 – Improving Creditworthiness
Establishing and maintaining creditworthiness can determine whether or not a supplier does business with you, what credit terms and interest rates you will pay, and if you will get approved or denied for business financing. Some small business owners use their working capital loans strategically to establish good credit by proving they can manage debt well. If you work with a lender who shares information about the loan with the credit reporting bureaus and this information is positive, it can help to boost your credit score.
9 – Educating Employees
Having knowledgeable, well-trained employees has a positive impact on productivity, customer service, and revenue for businesses of all sizes. This means that budgeting and planning for staff education and training is a must for small business owners who want to improve efficiency, retain top talent, and maintain an inspiring and rewarding company culture. Working capital funding can help you access an array of training options for your team, from hiring a consultant to help implement a new sales program to working with a software company to speed up your business processes and lower expenses.
10 – Capitalizing on Opportunities
As a small business owner, you never know when opportunities will occur. When you find the perfect location to expand your operation, get an offer to staff up a new company, or are suddenly approached about buying out a competitor, access to working capital financing gives you the freedom to jump on act-now opportunities to improve or increase your business.
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Summit Financial Resources specializes in working capital financing for small to medium-sized businesses that need increased cash flow. We provide working capital financing through invoice factoring, asset-based lending, inventory lending, and equipment financing.