Some businesses are seasonal in nature, and that means cash flow tends to dry up during part of the calendar year, and that needs to be accounted for. Here are some options which might be available to you to supplement your business income, and relieve the stress on your cash flow.
Business Credit Cards
A business credit card can be extremely handy during slow business periods and downtimes. They can be used very much like personal credit cards, and some of them even offer rewards such as extra points, cash, and frequent flyer miles. Before you apply for one though, make sure you’re aware of the annual fees and interest rates, so you don’t get gouged on excessively high fees.
This is somewhat different than invoice factoring, which permits you to sell your company’s invoices at a slight discount in exchange for upfront cash. With invoice financing, you get access to a revolving credit line, which does not interrupt the company-client relationship, which does happen with invoice factoring.
Cash advances can be a great solution for companies that have a seasonal business where revenues slow up and leave your cash flow stressed. The advantage of a cash advance is that it’s quick and unsecured, but the downside is that it will generally come with a high percentage rate.
Business Line of Credit
Although it is sometimes difficult to qualify for a business line of credit, they can be a fantastic solution for cash flow gaps. With a business line of credit, you’ll be able to draw against an outstanding credit line that you have, and then repay some portion of that each month to restore your balance.
If you can secure a short-term loan, it will definitely help you through any downtimes your business may have. The problem with this is that if you have the same seasonal slowdown every year, you would be obliged to keep applying for short-term loans every year, which could be problematic for your business.
Is your business subject to cash flow stress?
You might be able to relieve some of that cash flow stress by having an influx of working capital. Contact us at Integrity Financial Capital so we can discuss some ways that we might be able to provide that working capital to you.