Whether it occurs in small steps or by leaps and bounds, business growth is necessary for entrepreneurs to compete in today’s marketplace. Growth focused businesses are always looking for solutions that can help them reach the next big milestone, but taking on debt through loans isn’t always the preferred strategy.
The Debt Conundrum
Taking out large loans for business growth can prevent entrepreneurs from reaching their potential. Traditional loans may provide the capital necessary for growth, but the accompanying debt can make it impossible to maintain momentum. Growth may not guarantee a significant increase in sales, but debt from the loans must be repaid. Since loans used for growth projects have regular payment schedules, a good portion of revenue must be used to pay down the balance. When businesses take into account regular overhead expenses, payroll, advertising, and more, using loans could ultimately prove to be cost-prohibitive. The immediate growth achieved from a loan may be great, but the lasting debt and impacted credit ratings may place businesses in a situation where they are playing “financial catch up” for years to come.
Funding Business Growth without Loans
Savvy business owners try to build up capital reserves to fund growth projects on their own. The trick is to build up capital quickly so that revenue outpaces liabilities. However, when customers are remitting payments on staggered schedules, accumulating capital can be challenging. Instead of waiting for revenue to come in at a slow trickle, businesses utilize invoice factoring services. Factoring does away with staggered revenue and converts invoices to cash within 24 hours. By factoring invoices, business owners can accumulate capital quickly and take advantage of growth opportunities without losing any momentum due to debt. Even new businesses can get an edge on their competitors by factoring invoices and accelerating their growth schedules, instead of constantly moving goalposts because of a tight cash flow.
Start Growing Your Business
FSW Funding specializes in working capital solutions for growing businesses. Our team will work with you to create a factoring strategy that allows for a quick turnaround on customer invoices, so you can achieve business growth without becoming reliant on debt-based loans. To improve your cash flow and get in the fast lane to business growth, contact FSW Funding today.