Businesses need liquid capital in order to function. When a business is short on cash, then it is extremely difficult to perform important day-to-day operations. Usually, a business will borrow from a credit line at a bank or another source of funding. This is not always possible though. Credit cards or lines of credit might end up being maxed out when cash flow is low.
Certain businesses, for example, are very slow in the summer and have to borrow a lot until the fall and holiday season bring in a huge influx of capital. Maxed out credit lines, however, could outright shut a business down. Options do exist. Top financial institutions like Orion Business Capital can assist you in obtaining hassle free funding for you small to med-size business.
One very helpful strategy would be to employ accounts receivable financing plans. This might end up being the only way to keep a business solvent until the holiday cash flow season kicks it.
The way these types of loans work are very simple. They provide a bridge for funds that are forthcoming once invoices are paid. In other words, if a business has $10,000 owed to it on bills it sent out to clients/customers and all the money is going to be paid in 30 or so days, a loan can be taken out based on the invoices. It could be said this is a secured loan based on promised funds. Often, a flat fee is paid for the loan although interest and penalties are going to accrue if the loan is not paid back on time. Usually, lender will work out reasonable plans for extensions if some of the money is not forthcoming from clients.
Business owners who never sought such lending options might be a little less willing to borrow under these terms. No one should take out a loan he or she does not feel comfortable with, but it would never be a wise plan to ignore means of procuring hard cash when funds are tight. A significant amount of problems could end up arising.
Not having enough money to cover the costs of paying employees or being unable to keep proper inventory in stock is not going to help a business. Customers end up being lost this way and a business finds itself on shaky ground. Rather than go this route, it would be far better to take any opportunity to borrow necessary funds in order to keep the business afloat. Second chances in business are entrepreneurs are best served not undermining themselves.