Why Do Most Small Business Fail?
Small business ownership is the lifeblood of the American economy with over 99% of companies being classified as a small business. Entrepreneurs take the risky leap into working for themselves, and there is a lot of passion, time, and money put into the business. Most failures of business are not because of the product, owner, or market. Instead small business failure is because of insufficient cash flow.
Startup Working Capital
Working capital refers to a company’s assets and liabilities. You want more assets than liabilities, but if the assets aren’t liquid it can get rough. New businesses struggle to seek adequate financing due to various factors. Bank loans and online loans want to fund companies that have a longer time in business. Some cash advance companies take advantage of this and the high interest rates associated with cash advances reflect that.
Working Capital Management
This is why startup companies need strong working capital management procedures. Having too much capital tied up in accounts receivable could mean missing payments or missing sales opportunities because of supply and labor costs. Collecting on open invoices becomes a priority, and the time and effort it takes to collect from your customers can mean overlooking other areas of the business that require attention.
Startup Business Financing
Entrepreneurs have limited options when it comes to financing a startup business. Investors or venture capitalists can be great if they are industry experts, the right fit for your ownership style, and offer sufficient funding. Unfortunately, finding the right VC or investor to meet these needs can take time and cause your business to suffer in the meantime. Invoice factoring is well-suited for startup businesses looking for working capital funding solutions.
Startup Business Working Capital Financing
An invoice factoring company offering accounts receivable funding is a great solution for a startup business. There is no minimum time in business required, personal credit or business credit of the entrepreneur is not the basis of underwriting, and the facility limit grows with your business. Invoice factoring services rely on the strength of your customer, offer flexibility to your funding needs, and close the gap between making the sale and getting paid.
Eagle Business Credit Startup Financing
Eagle Business Credit, a top-rated factoring company, sees startup businesses in need of capital every day. We work with startups to provide the funding necessary to become industry dominant. When your business makes a sale, the invoice is paid by Eagle Business Credit in a day, Eagle waits the duration of the credit terms, and then Eagle collects from your customer. Factoring fees between 1 and 4% ensure your business is not overpaying for startup business funding.