According to the Wells Fargo Small Business Index, $10,000 is the average amount of startup capital required by a small business owner. Acquiring and managing your working capital is crucial when it comes to running a successful small business. Unfortunately, since companies need to deal with payroll, operating expenses, and all the other financial aspects associated with running a business, it can be difficult to acquire enough working capital.
That’s why it’s so important to have quality strategies for working capital funding. Here are a few working capital funding strategies you should consider:
- Taking out a working capital loan — Since it’s imperative for organizations that have sufficient revenue-generating opportunities to unlock some of the trapped working capital, taking out a working capital loan is a great idea. If the loan enables the company the ability to produce profits that exceed the cost of the borrowing itself, it’ll be a cost-friendly funding strategy.
- Accounts receivable funding — Accounts receivable financing is a great way to turn outstanding invoices, which are far too common when it comes to small business ownership, into actual cash. Approximately 60% of all invoices are paid late. This might be okay for organizations that have millions in the bank, but not for small startups trying to get off the ground. Financing receivables will help you get immediate cash, allowing you to focus on all the other essential aspects of your business.
- Limit unnecessary expenses — It sounds obvious enough, but far too many small business owners spend more than they should early on. You need to make sure you’re not overspending in any area of your business so you can start accumulating working capital, rather than unnecessarily wasting it.
As long as you’re constantly working on improving your business, have a team of hardworking and trusted professionals, and are doing everything you can to secure more and more working capital, you’ll likely have a very successful future. If you want to learn more about quality strategies for working capital funding or work with trusted accounts receivable financing companies, give Eagle Business Credit a call today!