Funding Gaps: Thriving and Growing Your Business without Debt
One of the biggest misconceptions held by small business owners is that debt-based loans are the only way to fill in funding gaps. The truth is there are more options available to small business owners than just traditional loans. Entrepreneurs do not have to rack up financial liabilities to fill in funding gaps and debt-free solutions are more accessible than ever.
Using Debt & Self-Reliance to Solve Funding Gaps
Taking out loans can severely hurt a small business before it ever hits its stride. While it is essential to resolve funding gaps, taking on debt prevents growth and can exacerbate future financial issues. Additionally, traditional lenders have limits on the amount of capital they can offer small businesses. Once those limits are reached, funding dries up but the debt remains. Some businesses want to avoid loans and take a more self-reliant approach to fill in funding gaps. Business owners typically do this by taking on a second job or by leveraging personal assets and savings. Business owners already have a lot on their plates, and taking on a separate job to finance operations is a surefire way to burn out quickly. Leveraging personal assets or using savings doesn’t help either, because business and personal finances should never mix, lest both become simultaneously jeopardized.
Merchant Cash Advances
Merchant cash advances offer an infusion of working capital without placing debt on the books. The advance in capital can be used for anything the business needs. Merchant cash advances also offer flexibility that traditional loans do not. Instead of rigid payment schedules, merchant cash advances are repaid from a percentage of sales which gives businesses the flexibility they need without placing a major strain on finances.
Purchase Order Financing
Purchase order financing – or PO financing – is a way for small businesses to level the playing field against larger competitors. PO financing is a debt-free advance in capital to complete large and unexpected orders, instead of losing customers to competitors. Once the order is completed and the customer pays the invoice, the financing is deducted and the difference is released as revenue. Purchase order financing allows small businesses to achieve rapid growth.
AR financing fills in funding gaps by converting open invoices to cash immediately. This removes staggered payment schedules and greatly improves cash flow for small businesses. AR financing also reduces the need for loans.
Wise Commercial Capital offers a wide range of debt-free funding solutions for small businesses. Contact our offices today to learn more.