The holiday season can be a busy and profitable time for many businesses. This is especially true for those that are on the front lines of the retail industry and the businesses that supply them. This is the season that puts many of those businesses in the black for their fiscal year, so it’s important to have the funds necessary to make the most of it.
Gearing up for the holiday season means stocking up on inventory, taking on additional staff and maybe even some equipment upgrades. This can put a serious dent in your working capital, leaving your business vulnerable. However, you don’t want to skimp on prepping for the holiday season. So, as a business owner, how do you preserve your working capital and make sure you have everything in place for a successful holiday season? Alternative finance providers offer multiple options that can help you do just that.
Merchant Cash Advance
For many retail businesses, it’s not unusual for the bulk of their transactions to be done via credit cards. For those businesses, a merchant cash advance can be the perfect solution for financing those extra holiday expenses. This alternative finance option can provide the funds you need quickly, allowing you to build up your inventory and workforce throughout the holiday season.
This funding option offers a more flexible repayment process than a traditional bank loan. An agreed upon manageable percentage of the business’s daily credit card sales are automatically transferred to the merchant cash advance provider. Because these payments are percentage based, they will be directly proportionate to your sales, preventing the need to use valuable working capital.
Invoice Factoring
For those businesses behind the scenes supplying retail merchants, keeping up during the holiday season can be equally challenging. Keeping sufficient inventory on hand to meet the demand can be a struggle, especially when your customers won’t be paying their invoices for 30, 60 or even 90 days. In some cases, the season will be winding down before you receive payment on those invoices. Invoice factoring enables you to leverage the funds owed to you when you need them most, allowing you to pay your vendors for the goods and services necessary to fulfill customer orders.
Invoice factoring lets you meet the holiday demand without taking on additional debt. Your business is simply being advanced money that is already owed to you. While there is a fee associated with invoice factoring, it can be a small price to pay to maintain a reliable reputation and guarantee future business. After all, if you can’t fulfill customers’ holiday season orders, next year they’ll be doing business with your competitors.
Equipment Financing
Whether your business is on the frontlines of the retail industry or behind the scenes, updating equipment to keep daily operations running smoothly is vital, especially during the holiday season. Broken or inefficient equipment can cause a business to miss out on the most profitable time of the year. However, business machinery and technology come with large upfront costs that can significantly reduce your working capital.
Equipment financing spreads out the upfront cost over time, enabling you to get new or updated equipment now without draining your working capital. Alternative finance providers will take the value of the equipment into consideration when determining transaction terms, and the equipment itself is used as collateral.
Ensure a Successful Holiday Season with Alternative Finance
Stocking up for the holiday season or any busy season can leave a small business in need of a short-term loan or specialty financing. These aren’t typically easy to obtain quickly through traditional lending institutions. CFG Merchant Solutions offers multiple working capital funding options to keep your business moving forward and avoid missed opportunities.
Whether it’s a merchant cash advance, invoice factoring, equipment financing or any of our other funding options, we will guide you in choosing the perfect solution for your individual business needs. Our team brings to the table more than 60 years of institutional investment banking experience in the credit, commercial finance, and capital markets.
We focus on providing capital access to small and mid-sized businesses (Merchants) in the U.S. that have historically been underserved by traditional financial institutions and may have experienced challenges obtaining timely financing. Contact us or apply online today!