Every successful business had to begin somewhere. Apple started in Steve Jobs’ garage, after all. While you’re probably not aiming toward worldwide corporate domination, you know your business plan has solid potential… as long as you can get funding. Too often, traditional lenders seem willing to hand over cash only to businesses that are already operating at high volumes. If you’re in the early stages of building your business, you need to know that funding is available to you through a variety of approaches. Alternative funders look at the full array of strengths that you bring to the table, rather than just the size of your business. Here’s how:
What Makes a Business Strong?
Monthly gross sales aren’t the only measure of a company’s health, especially when you’re just getting started. Here are some earmarks of a strong business, regardless of its size:
Right amount of Inventory
If you’re selling products, one indicator of your management ability is the amount of inventory that you have on hand. Too much may mean extra expenses for storage and insurance, or even that your stock might become obsolete before it moves. Too little inventory can leave you unable to meet the demands of an upcoming busy season. Planning ahead for extra funding so your inventory stays at target levels is a sign of good judgement — and if your schedule is tight, alternative funding has a fast turnaround time.
Financial Ratios in the Expected Zone
Different industry sectors normally have different ratios of gross profits to net sales, for example, or of net income to total assets. Sometimes an entire industry will experience a temporary downturn, and savvy lenders understand the background context for such trends. When your financial profile looks good compared to your competitors, that’s a great indicator of creditworthiness.
Good Sales Track Record
If your company is young, you don’t have years and years of history to show — but even a one or two-year timeline can paint a picture of the direction you’re heading in. When you know that future sales will be solid, as long as you can get a cash boost today, a merchant cash advance may be the perfect funding option for you. Payment periods are flexible, because they are based on a percentage of daily receipts. You can get the fast funding you need, without the stress of locking yourself in to fixed payments.
Do you have happy customers tweeting and posting about their interactions with you? Small businesses succeed or fail based on how happy their customers are, and if you have a social media presence, you’ll know what people are saying about you. More importantly, you can enter the conversation. Log in at least once a day, to boost your positive feedback and respond sensitively to any negative reviews. Sometimes customer suggestions are the most valuable source of new product ideas.
Get the Funding That’s Just Right for You
Choosing the right financing solution is a major element in helping your business grow sustainably. You don’t want to get locked into the wrong kind of loan early on, because new businesses usually operate on narrow margins. It’s essential to talk to people who make it their business to help small businesses turn into livelihoods and futures. At Rapid Finance we do everything in our power to try to get the funding you need.