For many businesses, working capital is scarce because expenses either exceed incoming revenues, or there is so little difference between the two that nothing is available for growing the business. If you were to secure a working capital loan, there are a number of ways it could be used to help your business, including all those described below.
Manage a Business Slowdown
You can never tell when there will be a downturn in sales which leaves you with a shortfall in your monthly budget. If you had a working capital loan, it would allow you to maintain your normal operations for the business until sales increases again, and your incoming revenues are healthier.
Maintain a Good Credit Rating
If you get behind on paying your bills each month, that will undoubtedly affect your overall business credit rating. That, in turn, could affect your ability to secure loans from traditional lenders. You could use the proceeds from a working capital loan to pay off your suppliers and manage other expenses, so you can maintain your strong business credit rating.
Overcome Seasonal Shortages
Many businesses have seasonal downturns that are fairly predictable, and when you know these are coming, you could use a working capital loan to tide you over. Once business picks up again, you’ll be able to make regular payments on that loan until the next downturn comes.
It happens fairly often in business that unexpected opportunities arise which would be of tremendous value to your small business if you had the working capital to act on them immediately. You might be able to secure extra inventory at a discount or to purchase inexpensive property with a working capital loan. When such opportunities to present themselves, it would be very much to your advantage to have the working capital to take advantage of them.
Does your small business need a working capital loan?
Most small businesses could benefit by having a working capital loan, and if yours would too, we might be able to help. Contact us at Purevue Capital so we can discuss some options which might work for you, and which will provide you with the capital you need.