Many small business owners will find themselves in need of financing at one time or another. In fact, cash flow issues are the reason 82 percent of small business fail. Most small businesses typically turn to their bank to get the financing they need. However, many are not yet profitable enough or don’t have a strong enough revenue or personal credit history to qualify for traditional financing. This doesn’t mean obtaining financing is impossible. Asset based lending can be an effective solution for businesses experiencing cash flow issues.
Asset based lending is business financing that is secured using a company’s assets as collateral. With unsecured loans difficult to get, the popularity of ABL has increased in recent years. It offers benefits similar to other financing options, such as a line of credit or an SBA loan but with less stringent qualifications.
Qualifying for asset based lending is easier than obtaining a traditional bank loan or line of credit. Instead of the extensive revenue and credit history, all that is typically required is a brief track record of profitability, stable financial management and most importantly, descriptions of assets that can be used as collateral.
One of the most common and easiest assets to leverage is a company’s accounts receivable. This is known as invoice factoring. Invoices owed by customers with strong credit and a solid payment history provide the perfect collateral as they can easily be turned in cash. Most lenders prefer to factor invoices that are paid in sixty days or less. Some asset-based lenders will also consider a company’s equipment or inventory as collateral, but leveraging creditworthy invoices is preferred by most lenders and presents the least risk for the business.
Asset based lending offers greater flexibility than many other types of business financing. There are typically fewer restrictions or covenants. While the funds must be used for a business purpose, this gives a business owner more control over how they are used.
Additionally, because the financing is based on the value of your accounts receivable and other assets, as sales increase and business grows, the amount of financing for which you qualify increases as well. Should you need to apply for additional funding, the process will be even easier. This can be extremely beneficial for companies who are growing quickly and need extra working capital to keep up.
Typically, companies that utilize asset based lending are small to mid-sized business that are experiencing growth. Establishing their creditworthiness with an asset based lender will build their business credit, opening up other financing opportunities and increase access to additional working capital. This improved liquidity can stabilize daily operations and allow you to focus on cultivating business growth.
The need for funding is often urgent and receiving it in a timely manner is crucial. Asset based factoring can be obtained much quicker than a traditional bank loan. Once the underwriting process has been completed, you can receive funding in as little as a few days. This access to quick working capital will allow you to keep up with operating expenses and fuel business growth without waiting for your invoices to be paid.
CapFlow Funding Group is an asset based lender specializing in factoring. We also partner with other alternative lenders and will work with you to find the best funding solution to provide your business with the working capital you need. Capflow delivers working capital with limited paperwork, same day approvals, and deposits within days, not weeks. We service many different industries with a variety of different funding needs. Contact us today and find out how invoice factoring can help grow your small business.
There’s a lot of talk these days about company culture. Although some business owners and managers think the workplace should be about work only, a little levity can significantly boost morale. Whether they buy into cultivating a company culture or not, most business owners and managers agree – positive workplace morale can be very beneficial.
A positive, fun work environment can boost productivity. Employees who can share a laugh or have a little fun will not only be more productive – they will produce better results. The opportunity to laugh can provide comic relief for stress. A workplace where a little fun and laughter are encouraged will make for happier employees and even have them looking forward to coming to work.
This positive attitude combined with increased productivity can result in significant improvements to a company’s bottom line. The reduced stress level can also cut down on lost work days and paid sick time. Studies have shown that health care costs in high-stress industries are nearly 50% greater than at other organizations. According to the Harvard Business Review, the American economy loses $500 billion a year due to workplace stress.
It doesn’t have to to be a major event. This could be something as simple as sharing a silly GIF or funny Facebook post with everyone. It can also help to take a little time to recognize and celebrate each other’s personal events and achievements such as birthdays, workplace anniversaries and promotions.
When employees can have fun together, it creates camaraderie and a bond that goes simply being coworkers. This is one of the key components to building a strong team, which can benefit employers and employees alike. Team building exercises and outings are a great way to foster group cohesion and have a little fun. Once they become a regular feature in your company culture, you will probably even find your employees looking forward to them.
When employees know they are part of a team, it builds confidence in their ability to tackle projects that would seem impossible on their own. It also provides employers with peace of mind knowing they have a strong team that will work together to problem solve and gets the job done.
When you have a position to fill, you want to attract the most skilled and qualified applicants. Applicants of this caliber will be in demand and will be researching prospective employers. In addition to salary and healthcare, they will be looking at the company culture. Essentially, you will be competing against others in your industry to obtain the top talent.
It can be extremely beneficial for your company to present itself as a fun place to work where employees feel they will be part of a team. It’s also important to show how you support the work/life balance as this is extremely important to today’s workforce. This could include anything from wellness programs and flexible work schedules to cutting-edge equipment and personal development programs.
It doesn’t matter if you’re a big corporation or a small, business, company culture matters. It can help grow your business or elevate it to the top of your industry. Whether you are just putting a company culture into place or you want to improve your existing culture, it can take a little extra cash. If waiting on outstanding invoices are holding you back, factoring with CapFlow Funding can be a great option to get the funds you need.
If you’re not waiting on invoices, but still need a little extra cash to kickstart your company culture, CapFlow has partners that provide services complementary to ours. We work with these partners to get you the appropriate funding for your business. Contact us today to find out how we can help.
