It may not be obvious that you need to expand if your business is full. When you first started, it was probably clear that you needed a bigger office, more employees, and more money to grow your startup. In many cases, it’s the only way to ensure your business survives and thrives.
But there comes a time when it’s no longer feasible to keep going with your current operations, and it may be worth seeking out financing options. That is especially true if you've met your growth goals but can't meet demand.
A working capital loan or cash advance would be the best option here. This type of funding is not only accessible through Equipment Financing but can also help you close the gap between your income and expenses. Here are three signs that show your business needs a capital funding increase.
- Your Business Has Negative Cash Flow
The most obvious sign that your business needs a capital funding increase is when your cash flow becomes negative. When you are running at a loss on your income and spending more than you are making, it is time to take action.
It's important to note that seeking financing shouldn't be seen as a band-aid solution but as an opportunity to review and reset your fundamentals.
- You Are Financing Fix Assets
Fixed assets are anything your company owns for a long period and have significant implications on financial performance. These can include items like machinery, furniture, and other physical assets.
However, it’s important to note that obtaining financing through this method can be costly because lenders will take control of your fixed assets if you fail to pay back your debts. That can cause significant problems for your business if you’re not careful. It’s also crucial to ensure that you only use the funds for growth-enhancing activities and not to plug holes in your budget.
- Your Products or Services Are Seasonal
Many of the products and services offered by small businesses are seasonal, so it’s a good idea to look at your product or service inventory levels regularly to ensure you have enough in stock during peak season. Clothing for warm summer weather or cold winter weather is a classic example of a seasonal product.
If you’re experiencing a slowdown in sales or are unable to meet purchase orders, this is a clear indicator that your business requires more cash. You might not want to borrow money to solve this problem, but you definitely should be prepared to seek out investors if necessary.
We Are a Leading Orange County Equipment Financing Company
Businesses rely on capital to grow. Whether you’re a startup looking to launch a new product or an established company seeking to increase profitability, your business needs equipment and money to get going and maintain momentum.
If your business is on the brink of bankruptcy and you need a capital funding increase, contact Equipment Financings with a request, and we will help your business grow. We have many years of operating in the industry, so don’t hesitate to contact us if you have any questions.