As I’ve said before, most companies will need working capital sometime in their lifespans.
It’s a bit of a double-edged sword to work for a finance company; indeed, the sister blog to BizEngine is the official blog of Direct Capital. One edge because I’m advising you to look into financing knowing full well you might (should!) check out Direct Capital. The other edge because I know a little bit about why working capital can be a great thing for small businesses of all stripes.
You’re here to read the reasons I want to provide today, though. Let’s get to them.
- You have a glaring need. The most common reason businesses go out hunting for financing is also the most obvious. If your business needs a re-model now and you don’t have the money for it, pursuing financing is a smart bet because the approval process is becoming more streamlined by the day. When you really can’t afford to wait—or you just want to get started on the process—working capital probably makes a lot of sense for you.
- You have a great opportunity. Even more so than straight need, opportunity is a great reason to look into working capital. If you want to buy inventory at a steep discount but don’t have the cash lying around, or a chance to dive into a marketing blitz that will help to promote a new service that you think will knock customers’ socks off. With the quick turnaround on working capital, you can seize opportunities in a way you can’t with other kinds of financing.
- You want to pay it back quickly. The terms on working capital leases tend to be fairly short, in the order of months rather than years. It’s a huge advantage for anyone who wants to clear debt off their books in short order and can afford to do so. I would be willing to bet that describes a lot of your businesses.
Why have you sought out financing in the past? Let us know!
Photo credit to gabriel183 at http://www.sxc.hu/photo/592509