As a business owner, you see large amounts of money come and go on a daily basis. It’s all part of running the business. As your company grows and you take on larger clients, you may run in to cash flow problems that are difficult to manage. While receivable financing is a fast, easy option that gives you access to cash without taking on additional debt, you may also want to pinpoint where your cash flow problems exist.
We’ve determined some of the most common reasons businesses deal with cash shortages during certain time periods, and why others seem to thrive. Business growth can be a positive and a negative, as the costs to ramp up production for services and products don’t quite match the revenue you are bringing in.
You simply can’t generate revenue until you have the inventory to satisfy your customers. As your business grows and demand increases, you must have the cash on hand to purchase additional inventory. The more inventory you have on hand, the less cash you may have to pay your employees and your bills on time.
Changes to Infrastructure
Businesses regularly deal with infrastructure changes as they grow. You may need access to a larger office space to hold additional employees or inventory, or it may be time to upgrade your technology to be more efficient. Regardless of the reason, it’s important that you have the cash on hand to meet your needs.
Growth Obeys a Different Set of Rules
It’s possible to predict how your company will grow over the years, but fads, publicity and market conditions are often factors you cannot control that have a direct impact on how much your company grows. When your company goes through an unplanned growth spurt, you must have the cash on hand to meet your customer’s needs while your services and products are selling.
How Can Receivable Financing Help?
Here at Universal Funding, we are the one stop shop for all your cash flow problems. With our factoring program, you have access to cash without taking on additional debt when these problems arise. Visit our rate form today to learn more.