It’s no secret that many small businesses need to increase cash flow. 82% of small businesses fail because of poor cash flow management, making it the number one reason they go under. Having more money coming into your business than going out, not only ensures that you can meet your financial obligations – like making payroll, paying suppliers, and buying equipment or inventory – it’s necessary for taking advantage of growth opportunities. Beyond success, positive cash flow gives many small business owners peace of mind.
The problem? Options for small business funding are limited. The ones that are available can be difficult to qualify for. Take banks, for example, while lines of credit come with low interest rates, they typically require:
- Profitability, or a path to profitability, as demonstrated by three years of financial statements, prepared by a CPA or accountant
- A personal guarantee as well as a personal net worth statement. (Also common for alternative finance).
- Time: The process from application to approval could take three to six months. That’s not counting the time needed to prepare all the necessary documentation.
These requirements often don’t work for small business owners who don’t yet have a solid financial track record and need to increase cash flow sooner rather than later.