Business Tips for Paying for Your Stock
When running your own business, you’re bound to go through challenging times, whether that’s due to a period of economic uncertainty, or your footfall has taken a hit – which can happen for various reasons. This can have an impact on the way your business runs, and your profits, but there are ways that you can pay for your stock, even when your cash flow is struggling. Loans for small businesses are available from a range of lenders, so you can choose an option that suits your requirements. Here are a few tips to help you.
Consider short-term business loans
During the time that you’re in business, you may need an extra bit of cash to help you buy stock. No matter the type of business you are in, if you do not have goods to sell, you cannot make money, so not buying stock is not an option for most of us. Those that struggle with cash flow issues – maybe you’ve been faced with an unprecedented expense, or you’re simply not getting as many customers through the door as you need to – are most likely to struggle when it comes to paying for their goods. Thankfully, there are ways that you can access additional finance to help you keep your business running smoothly. Short-term business loans can be a great option for those struggling. They can help you with your cash flow issues, and give you access to finance quickly and easily. Here are a few of the most popular types of short-term loans that you can use to give your business finances a boost, and help you pay for your stock.
Merchant Cash Advances
This is a great way for businesses to have access to cash when they need it most. Different from a loan, a merchant cash advance works well for companies that have a high sales volume and take card payments. The amount of capital that you choose will be paid to you upfront, and you will then make repayments with a percentage of your future sales. You can pay this back over months or even years, but your lender will have specific requirements for you to follow. Merchant cash advances can be a good choice for those that do not qualify for traditional loans.
Invoice financing
This type of finance is referred to as a revolving loan, and it can be difficult to get your head around, so here is a simple explanation: Businesses will request a certain amount of cash from their lender and will use outstanding invoices as collateral. When the business then receives the invoice payment from its customer, it will first go to the lender, who will subtract the interest, and give the rest back to the borrowing business. If you use invoices as a primary way of payment, they can hold your cash flow back when they are not paid on time – invoice financing is a way of resolving this issue.
Lines of credit
These types of loans can be a good option when it comes to having the funds available to purchase stock. They work just like a credit card – businesses choose a set credit limit from their lender and can spend as much or as little as required. If you do borrow from your line of credit, you’ll need to make a monthly repayment depending on how much money you used. If you need a sum of money quickly, using a line of credit means access to money upfront, meaning you can buy stock to help your business thrive whenever you need it most.
Increase prices
Other than short-term loans, there are other ways that you can pay for your stock. If you have found that the goods you sell have gone up in price and that your money is not going as far as it used to when it comes to buying them, it might be time to put your business’s prices up! Increasing the price of your products in line with inflation and other economic issues is normal – just make sure that it is within reason. If you provide a great product, customers will be more likely to ride out the increase because they love your product, and it means your cash flow will benefit when it comes to buying stock.