It is essential for any business to continually evolve, and as a small business owner, you probably spend a good deal of time thinking and worrying about future growth. Expanding inventory, enlarging your headquarters, hiring staff, launching a more aggressive marketing strategy, and upgrading technology all require capital. You also can’t predict when you might need cash for an unexpected expense or opportunity.
Financing provides a reliable source of funds for what you need to grow. Regardless of the funding source you choose, you will need to analyze your current pain points, determine what you need to take your business to the next level, and consider the most cost-effective approach to meeting those needs.
Here are some telltale signs that it may be time to include financing as part of your business growth strategy.
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Cash flow is an ongoing challenge.
Delaying vendor payments, putting off inventory purchases, or struggling to make payroll are all indications that you should seriously consider financing. Cash flow can be a challenge for any business, even when you are steadily generating revenue. Working capital financing can provide the funds to cover temporary shortfalls so you can meet operational expenses when needed.
You’re short on inventory.
Inventory is one of the most difficult expenses for many businesses to manage. Companies often have to invest in products before their customers can buy them and offset the cost.
Not having enough inventory to fulfill orders is a common issue for small and growing businesses. Receiving a large order or picking up several new customers unexpectedly can wreak havoc if you don’t have the cash to purchase the inventory you need. You may be anticipating orders due to the launch of a new product line and need inventory on hand; or your business is seasonal and you need to stock up well in advance.
Asset-based funding options are ideal for offsetting inventory costs so you can meet customer demand without hurting your cash flow. Summit Financial Resources offers a variety of working capital loans that involve using your accounts receivable and other assets as collateral. We can mix and match products to suit your exact financing needs, including Invoice Factoring, Asset-Based Loans, and Inventory Lending.
You need more hands on deck.
You have more business than you can handle. Despite putting in long hours, you and your employees cannot keep up with customer demand. You know this is not due to a temporary spike in orders or a one-off project you’ve taken on. You simply are at the point where you need additional staff in order to keep growing.
Rather than cut costs elsewhere, small business owners may choose to use financing to cover the expense of hiring new talent as well as the increase in payroll. To determine whether or not this is a viable option, review your budget, decide exactly what skills you need, and determine what you can afford to pay for them. If you come up short, working capital financing can help you bridge the gap.
You’ve outgrown your space.
As your business grows and you add more staff, you may literally run out of room. Expanding your operations involves moving to a larger space or enlarging your existing space. Either way, you are likely to need financing in order to secure additional square footage, cover moving costs, or pay for new construction.
You’re using outdated equipment or technology.
From forklifts to computer tablets, your business needs the best possible equipment in order to be competitive, provide reliable customer service, and boost employee productivity. As your business expands, it will be essential to invest in new equipment, repair or replace broken or outdated equipment, and keep pace with rapid changes in technology.
Financing can help you manage the costs associated with purchasing and maintaining equipment so that you can continue to fill orders, communicate with customers, and upgrade systems to streamline your operations. This can be an expensive proposition, but it is a worthwhile investment that will save you time and money in the long run.
You want to sleep at night.
Risk is inherent in running a business, and the wise small business owner plans for uncertainty. You have no way of knowing if or when the market will change for better or for worse, or if a fire, flood, or power outage will force you to temporarily shut down. That’s why it’s important to create a financial cushion as part of your strategic planning process.
For some, this means having six months worth of operating expenses in hand. For others, it means putting financing in place sooner rather than later. You may not need it today, but having quick access to cash provides a sense of security, knowing you are prepared in case of emergency, and your business is well positioned to survive a slowdown or disruption.
Growing your business requires vision, planning, and understanding that financing is vital to your success. Summit Financial Resources will partner with you to create a custom financing option to support your strategy for growth.
Working Capital Financing is a few clicks away.
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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.