By Chad Otar
Small business owners face a series of financial challenges, which requires specific types of assistance and ready access to capital. It is this provision of short-term help – it is this infusion of money – that can enable a small business to weather a temporary slowdown in sales or activity, or upgrade or purchase equipment that will make a company more competitive and agile.
Awareness of this fact is, however, something else altogether; because it is crucial that small business owners know about these opportunities, and it is vital that they seize these rewards, so their respective organizations can survive. Or, where conventional lenders may decline an application for a short-term business loan, there are alternative means of financing that small business owners should – indeed, they must – embrace.
Covering Ebbs and Flows
First, let us review the need for a loan when a company has a shortfall of cash or a decrease in revenue. This situation may be a seasonal phenomenon, as many small business owners have peak months or quarters of sales and profits, which means there is nothing wrong with the overall health of these companies. If anything, it is the predictability of these troughs and valleys that confirms the resilience of a small business: A lender can see a pattern that repeats itself like clockwork, for years or even decades.
A loan for this kind of business has less risk, while it allows an owner to maintain cash flow, increase marketing and advertising campaigns, develop new products and services, or attract more customers.
Investing in Growth
Secondly, a short-term loan can be the financial lifeline necessary to repair or enhance existing equipment. For, just as a car cannot operate without upkeep or mechanical care, a small business cannot function when its hardware (electronic and manual alike) encounters a sudden emergency because of a computer meltdown, on the one hand, or a weakened assembly line, on the other. Investing in this maintenance, or using the money to buy new and better equipment, is what a small business owner wants.
Thirdly, a short-term loan can give a small business owner the capital to purchase inventory in bulk – at a discount – when time is of the essence. These actions happen in a matter of days, sometimes even hours, where a vendor demands payment immediately. Without this capital, a small business owner will miss the chance to save a lot of money in the here and now.
These loans deserve greater visibility because, given the circumstances that small business owners often confront, there is a clear need for this kind of assistance. Educating potential borrowers about this fact is critical to allowing them to run their companies without fear or uncertainty. It is the source of their potential financial salvation, and the outlet for their own economic enlightenment.
Together, lenders and small business owners can advance their interests and accomplish their particular goals. Making this scenario a reality must be a top priority. Only then can small business owners thrive – with confidence and clarity.