Many new, small businesses have just opened or were struggling amid the Covid-19 pandemic and are now again seeing signs of life. As more and more people get vaccinated and with indoor shopping restrictions lifted, foot traffic has increased. People who, for the past time period, were doing all of their shopping online, are leaving their homes again to support neighborhood shops.
But even with the expectation that sales will rise over the next several months and the remainder of the year, new businesses are still struggling to stay afloat. According to the U.S. Bureau of Labor Statistics, even in non-pandemic times, 20% of U.S. small businesses fail within their first year, with a 70% failure rate by the end of a decade. This time period is presenting extraordinary challenges.
In many cases, new, small businesses such as groceries and convenience stores struggle because they don’t have the requisite cash in hand to pay for the products they need to stock, yielding empty shelves. They don’t have a budget for marketing and advertising, making it difficult to make their presence known in the community. Then there are also businesses doing well that need to expand or buy new equipment but are struggling to afford the upgrades.
In all of the above examples, businesses could thrive by having more cash available. One option, in addition to business loans, is a cash advance. (Full disclosure, my company offers this service, as do many others. A cash advance can have less complexity than a standard bank loan. Once approved for an advance, upon acceptance, a merchant can also expect to see funds in their bank account within 24 to 48 hours. With a cash advance, a business’s health is a factor weighed more heavily than its credit score. It can also offer flexible payment terms such as the ability to deduct a small percentage from the merchant’s daily credit card batches.
Reasons To Apply For A Cash Advance
After you’ve applied and accepted a cash advance, consider using it to improve business operations and generate revenue in the following ways:
• Business Expansion and Renovations: A store may be doing so well that it wants to expand but needs available cash. According to one 2021 survey, nearly half (49%) of small business owners plan to increase staff and expand or remodel their business.
• New Equipment, Inventory and Supplies: You might be seeking to add trendy, high-tech equipment, and upgrades can be costly. Plus, store owners need to make sure they have enough inventory for customers and can access bulk purchase discounts. Being unable to stock enough inventory means empty shelves and frustrated customers leaving for other shops, and maybe never coming back.
• Marketing And Advertising: So your new business is open. The layout is perfect, the store is sparkling clean and inventory is in supply. It’s time to get your marketing going! Advertising can include marketing in local newspapers, online and television, printing signage for your windows, paying to get the word out at events and paying for direct mailers.
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