Working Capital Solutions

Mid-sized companies with strong sales can still face cash shortages that hinder their ability to seize business opportunities. Traditional bank financing is often not viable due to strict credit and operational history requirements, as well as lengthy approval processes and inflexible terms. Alternative working capital financing solutions, like cash flow loans and inventory lines of credit, provide just-in-time capital tailored to the company’s immediate and temporary needs, offering the flexibility to act quickly.

Inventory Financing

In an uneven economy, mid-sized companies often struggle with cash flow, making it difficult to harness potential gains. Traditional bank loans can be challenging to secure, but alternative lenders now offer solutions such as inventory financing. This method uses a company’s inventory as collateral to provide immediate cash flow and is typically structured as a revolving line of credit. Although inventory financing is often more costly and intricate than receivables financing, it can be a practical option for businesses with significant inventory requirements. This approach is particularly beneficial when combined with other asset-based lending options, such as equipment financing or purchase order financing, to optimize cash flow management.

Cash Flow Loans

Uneven cash flow is a significant challenge for small businesses, often preventing them from pursuing new opportunities. Cash flow loans provide a short-term financing solution based on a business’s expected future revenue, with quick approval and funding, albeit at higher interest rates. This type of loan is ideal for businesses needing immediate capital to smooth out seasonal cycles, launch new projects, pursue inventory discounts, or cover unexpected expenses.

SBA 7(a) Financing

SBA loans are the best option for small businesses needing financing due to their low cost and flexible terms, guaranteed by the Small Business Administration (SBA). The SBA 7(a) loan is the most common, offering up to $5 million with guarantees ranging from 75% to 90% of the loan amount. These loans are easier to obtain through SBA-certified lenders as the SBA reduces the risk for lenders, making financing accessible to more businesses with profitable outlooks.

Inventory Line of Credit

For fledgling retailers, wholesalers, and restaurants, maintaining the right inventory levels is critical to success. Any cash flow interruption can disrupt inventory purchases, causing further cash shortages. An inventory line of credit (LOC) provides a quick, reliable source of capital, allowing businesses to buy necessary inventory promptly and avoid losing customers or damaging their reputation. This type of financing is especially suitable for smaller companies with strong sales but less stellar credit, offering flexible borrowing and quick repayment options.

Merchant Cash Advance

Future revenue advances, offered by alternative lenders, provide capital based on a fixed percentage of future revenues, sharing both the risks and rewards of the business’s performance. Unlike traditional loans, there are no minimum monthly payments, and repayment varies with business revenue. This financing is ideal for rapidly growing businesses needing quick capital for activities like expansion, marketing, bulk inventory purchases, or buying out investors, with automatic repayment through ACH sweeps or credit splits.

Working capital solutions, such as inventory financing, cash flow loans, SBA 7(a) financing, and merchant cash advances, provide quick, flexible capital for mid-sized businesses to manage cash flow and seize growth opportunities. These options ensure businesses can act swiftly and maintain momentum. Discover your business’s potential with customized working capital solutions. Reach out today to find the ideal financing option for your needs!