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Seasonal Cash Flow Issue #5 That Membership-Based Businesses Experience (and What To Do About It)
Post Series: Seasonal Cash Flow Issues

If you’re new to this 5-part series, you can get caught up on the previous four seasonal cash flow mistakes we covered earlier this month, including:

Cash Flow Issue #1: Failing to Forecast and Running Out of Money

Cash Flow Issue #2: Being Overly Optimistic About Your Projections and Pricing

Cash Flow Issue #3: Not Competitively Capturing Seasonal Market Share

Cash Flow Issue #4: Lackadaisical Accounts Receivable

This week, we’re wrapping up our series with #5 of the most common, seasonal cash flow issues that membership-based businesses experience, causing their need for one or more small business loans. 

Cash Flow Mistake #5: Not Saving Enough Net Working Capital to Execute on Ideas and Plans

Last but not least, this is one of the most common issues small businesses experience, despite their best intentions to save. It’s also a key reason why small business owners turn to quick-access, small business loans to help get them out of sticky situations.

Many small businesses are operating with little working capital, leaving them at risk of insolvency if they suffer a poor sales quarter. Some businesses manage their risk by closing their doors during slow seasons. This strategy might work for a small, tourist-based business, such as a kayak rental shop or bed & breakfast, that experiences significant, seasonal spikes and dips. 

What To Do About It:

Consider your options:

Most businesses cannot afford to be open for only a few months out of the year, and so they are left with three options to raise or recover their working capital:

  • Increase their prices
  • Cut down on variable costs
  • Raise capital from investments or outside investors or lenders, including small business loans

Start putting some working capital aside every month:

You may already appreciate the logic and virtues of reserving enough working capital for everything from addressing unexpected emergencies and taking advantage of timely marketing opportunities, to having a little extra set aside to help ease your business through slower seasons. And you may already be doing your best to save whatever amount you can, but end up dipping into it before it gains momentum. 

Plan in-advance who you’ll go to for help if and when you need it:

Perhaps your business ended up with more costs than expected to throw a holiday staff party, decorate the studio, or have new membership promo cards printed and ready to use. Regardless of the reason, it pays to know in-advance who to go to for fast and easy financial relief when you need it most.

Need Cash Flow Help Now? 

Is your business feeling stuck in a situation that only an immediate influx of money can resolve? How can small business loans help?

The problem with bank loans and lines of credit:

Applying for a small business loan from the bank can take weeks, and many small business requests aren’t ever approved. Banks are typically only interested in substantial and long-term loan requests by business owners who have sufficient liquidable assets for securing the debt.

Considering that many small business owners are busy wearing several hats in their business, they don’t have the time to go through meetings with banks and potential lenders. When a financial emergency arises, time is of the essence and they need help, fast! 

And considering that many small business owners, already invested their own personal assets and savings in launching their business, they need a lender that considers their situation and offers loan amounts and repayment terms that are tailored to their unique requirements. 

Company Capital Can Help

While your business may be counting on increased sales this quarter, keep in mind that the holiday rush is also a time when businesses experience Cash Flow issues due to poor prior forecasting or lack of operating capital. Small business owners come to us for this very reason, seeking immediate financial support through one of our small business loans. 

100% Canadian owned, Company Capital offers small business loan options that are based on your business’s historical sales performance. 

At Company Capital, you can speak with real humans at our office who will listen to your situation, and guide you through a fast and simple application process. 

Borrowing from Company Capital is a heck of a lot faster and more convenient than the process involved when borrowing from banks

It takes as little as 3 minutes to apply for a loan from us online, via phone or email. Over 90% of applicants are approved for our Term Loans, receiving funds within 1-2 days. 

Actual Clients, Actual Results

Take a look at what other local small business owners have to say about us and how our small business loans have helped them. 

Choose The Right Business Loan For Your Situation

Find out which loan option is right for you, take a look at how easy it is to apply, or give us a call at 1 (877) 595 2346 to learn more. We’re proud to support small local businesses and serve as trusted advisors in helping you grow your business.

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