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7 funding challenges small businesses face—and how to overcome them

2 min read

As a small business owner, you get to be your own boss and build the company you want. But even a successful business has pain points, especially when it comes to funding––or lack of it.

Here are some ways to meet those challenges.


1. Not enough money: A lack of working capital or funding is one of the most common reasons small businesses fail. New business owners may not understand cash flow, underestimate how much funding they’ll need to survive their initial years, or have unrealistic sales expectations. It’s vital to determine how much working capital your business needs to get started and stay in business until profitability can be sustained. It’s also wise to have a few backup plans––such as budgetary adjustments or other sources of financing you can tap into––to make sure you stay on track.


2. Managing cash flow: Poor cash flow management is one of the top reasons businesses fail. You can help keep your books in the black by closely monitoring your accounts payable, accounts receivable, and cash flow; knowing when a client isn’t going to pay; following up with late paying clients, and cutting costs where you can.

Need a cash flow infusion?

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Desktop version or call 800.556.9145

Need a cash flow infusion?

Get started
Desktop version or call 800.556.9145

3. Business growth Whether you want to buy more inventory, make future plans, or simply grow, small businesses experience a number of growing pains. When you’re ready to take your business to the next level, it might be time to look for financing. Nearly half of QuickBooks Capital customers identified “expand/improve business or pursue new opportunities” as the reason for seeking a loan.1


4. Competition: Underestimating your competition can be an insurmountable challenge if left unchecked. Knowing what your competition is doing and finding ways to make your business stand apart are keys to success. Identifying your top competitors and putting together a competitor analysis to research the strengths and weaknesses of your competition is a critical part of your business’ marketing plan.


5. Costs of running a business: Accurately assessing the costs of running your business can mean the difference between success and failure. It’s vital to have enough funding to carry you through the ebbs and flows until your business is profitable, especially if costs are rising. Be sure to realistically assess how much working capital you’ll need for salaries, rent, and other overhead expenses, such as utilities, marketing, and equipment maintenance or replacement. It’s OK to seek help or take on responsible debt when you need it to.


6. Revenue and sales: Generating revenue and sales is a common challenge for small-business owners. Sales usually represent the largest source of a company’s revenue, but it’s important to account for revenue from non-sales sources, too. For example, revenue from renting or leasing space or equipment owned by your business, or interest earned on loans or debts owed to your business.


7. Limited resources: The majority of U.S. entrepreneurs start their businesses on a shoestring, according to U.S. Census data, which indicates that more than half of all small businesses were started for under $5,000. That’s why even the most frugal, productive, and efficient new business owners need enough money to allow time to work out the kinks, learn from mistakes, and build a following.


Funding when it matters


When your business needs a cash infusion, it’s important to compare your financing options. QuickBooks Capital provides flexible business funding when you need it. You’ll find competitive rates, a quick online application, no origination fees, and no prepayment penalties. That’s because we’re investing in you for the long run and we take a holistic view of your business to create funding options that can help your small business thrive.



We want to hear from you! What do you think?



1QuickBooks Capital Customer Survey, May 2018