If you are a retailer that relies on inventory of your products to sell, fall Holiday Season can be both a boon and a disaster waiting to happen. Many times, small businesses fall prey to two different situations that can seriously affect their ability to operate and satisfy customer demands.
High Demand, No Credit
Many businesses do up to 60% of the year’s business in just two months, November and December. Many small businesses simply find it impossible to effectively fund that type of demand. After maxing all credit lines and available credit, sales potential becomes limited and they simply cannot take full advantage of opportunities for the their business. This can have two disastrous effects. First, customers walk away frustrated and unhappy because they were unable to get the product they wanted and therefore carry a negative perception of your business, losing you a potential long term client. Secondly, you leave untold profit on the table by not being able to sell to your maximum because of the shortage of funding.
In order to fund large portions of business for such a short amount of time, businesses sometimes take out large personal loans, get large credit lines or other forms of large upfront cash installment loans that sit unused until sales actually start. During that lag time, of course interest and payments are due at a fixed rate. If sales have not started yet, it can be disastrous to meet these fixed payment demands, especially when there is lag time from supplier (that may be overseas) to the end client. It is not uncommon for payments to accrue for 3 to 6 months before sales start taking place.
Cash Advance Solution
A cash advance solution can provide the flexibility and payment schedule perfect for these types of situations. You can get one or multiple cash infusions into your business based on your credit and debit receipts in order to provide crunch time financing. These advances can cover other shortfalls or the important inventory you might need at this time. With a payment schedule that follows only your sales receipts by debit or credit, you never have to worry about a fixed payment that you might not be able to make.
The loan can be paid back over a period of just a couple months – up to a period of almost 18 months for those that qualify. The percentage of sales paid back daily depends on your sales and receipts.
The reality is you can have an amazing Holiday Season with the best of all worlds, one where you can meet all your product demands – making clients satisfied, maximizing profits and meet your financial obligations.