Business owners have been watching the Fed’s response to economic uncertainty with bated breath. Once expected to be a passing phase, the pressure of rising inflation and subsequent interest rate hikes have settled into a longer-term pattern. For business owners, this sustained pressure presents many challenges and tough decisions as they attempt to plan for an uncertain future.
According to the MetLife and U.S. Chamber of Commerce Small Business Index, 90% of business owners report that their operating costs have increased this year, and 55% are concerned for the financial health of their business. It can be difficult to find any room to think clearly in times like these, let alone plan for the future. But taking time now to create some room for growth could save businesses from the shocks and injuries that recession threatens.
A working capital loan could be the answer.
What is a working capital loan and how can it help?
Taking action early is advisable in a crisis. Many funding methods and investment opportunities take months, even years, to become established and start to bear fruit. Meanwhile, staff becomes burned out, opportunities are passed over, and customers are lost along the way.
This can put business owners off from making any big changes or pursuing additional funds during an economic downturn. However, smart leaders learn that having an injection of cash in the business at a difficult time can re-energize the organization and get plans moving again.
How do working capital loans work? Even if you don’t need funds to pay for a large project right now, getting ahead of the times could be wise. Taking out a working capital loan before money devalues could save you later on.
A working capital loan provides just that: working capital. This injection of cash could be used to innovate, to become more sustainable, to grow in a certain direction, to find new audiences, to digitize, or just to survive in a way that feels a bit more stable. It’s your call.
What are the advantages of using working capital loans for business?
Working capital loans are an option for businesses trying to combat the hardships of inflation and the current recession environment. If you know how to recession-proof your business, you can give your team and your company a much-needed breather at this crucial time. Here are a few ways a working capital loan could help you:
- Boost your margins
Margins can shrink rapidly during a recession. You’re not selling the same volumes; you’re lowering prices while your suppliers may be upping theirs; it all adds up to less profit. Having some extra money in the bank will help you save some of that margin loss by enabling you to lower your customer acquisition cost by investing in customer service and the quality of your digital experience.
- Keep your inventory healthy
It is critical to maintain stock levels in times of economic crisis. Keeping products in stock allows you to continue producing and serving customers while competitors are hit with supply chain issues. A working capital loan could give you the extra freedom to purchase the materials you need to stay on top of demand and react to obstacles quickly.
- Take opportunities to grow
With the time and space afforded to you by a working capital business loan, you can cut back on the hesitant, cautious behavior that crisis time promotes. Instead, do the things you would do if you could prioritize growth. Seize opportunities like updating your technologies, developing digital solutions to better serve customers, expanding to a new market, or investing in new equipment that will put you in good standing for the future.
- Change quickly with easy processing
The pace of a working capital loan is beneficial for business. Applications for working capital loans are quick. At PEAC Solutions, we require tax returns for small businesses; records of income and expenses give us a perspective on your corporate history and standing. Once all required information is received, the completed application leads to a funding process lasting as little as 48 hours for a working capital loan of up to $150,000. Moreover, the money itself can be supplied in a short amount of time if your application is completed in full and you’re approved for the loan.
- Get a moment to recover
The boost to profits and extra room to breathe afforded by a working capital loan can be transformative for businesses at a difficult time. It’s no small thing to have a moment to recover without financial pressures hanging over you. Give staff some relief. Take time to plan for the future, plant seeds, and get organized; you’ll be better prepared for the next crisis rather than running on empty.
Learning how to recession-proof your business is critical if you’re going to survive and continue to grow amid recession concerns. Put some of your worries to bed; learn more about the kinds of working capital loans offered through PEAC Solutions and you could get your loan moving in mere hours.
PEAC Solutions is a DBA of Marlin Leasing Corporation. Equipment financing is provided by Marlin Leasing Corporation. Working capital loans are originated by WebBank.