Month: October 2020

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Tips for Maximizing Your Small Business Working Capital Loan

Small Business Working Capital Loan on a computer

So, you got approved for a working capital loan. Congratulations! Many small businesses struggle to get approved for loans because of various reasons (e.g., lack of a substantial track record to prove their profitability, low business, or personal credit scores). Getting the much-needed funds for your business has no doubt removed a huge burden off your shoulders. But don’t let your relief lull you into a false sense of security.

‘Working Capital Loan’ Definition

In a nutshell, a working capital loan is a loan that provides working capital for a business – easy, right? It is usually awarded as a line of credit. It isn’t, however, ideal for solving recurring, long-term financial problems.

A working capital loan is meant to keep a business running by funding its day-to-day expenses and help keep it keep money in the bank — that is, have profit left after paying off bills and overhead costs.

Here are some tips on how you can make the most of your working capital loan:

  1. Strategize the order of priority for your payables. Working capital loans are never intended to solve long-term problems, as you cannot use it to pay off massive debts at once. This is especially true if you receive the loan as a line of credit: there’s a limit to how much you can borrow over a specified period.  Are there suppliers with whom you cannot afford to have a sour business relationship? Prioritize settling your bills with them, then propose an alternative repayment scheme for other suppliers who’re willing to give you an extension on your payments.
  2. Now that we’re on the subject, prioritize paying your people their salaries. The cash flow might be the lifeblood of a small business, but it’s the people in your organization who keep things running. Having said that, you may have to reevaluate your employment structure for redundancies and teams that are not generating income. If it comes down to it, you’ll want to keep the people who are making a profit for your business.
  3. Do better on securing your receivables. Given that you don’t have a limitless line of credit, you need to draw cash flow sources from other, more sustainable places as well. Your receivables are the first things you should look into. Review your invoicing process. Are you sending them out on time? Do you follow-up with your customers regarding their payments, or are you too lenient on delinquencies? Do you often make billing errors? If you can correct the flaws in your invoicing, your cash flow will improve, and you’ll be less inclined to max out your line of credit each month.
  4. Increase your capital by exploring other income sources. Many small businesses that seek working capital flows are seasonal: they depend on the influx of income for the months when their services are needed to sustain them during the off-season months. When the revenues fall short, however, businesses will be under massive strain during the slow months. A working capital loan can help weather this period, but it could backfire when payments are due and revenues are still trickling in. A better solution would be to explore other ways to generate income even as you tap on your line of credit. This way, you can increase your working capital and stay afloat until you’re back in season.

Probably is Here to Help Get You the Small Business Working Capital Loan You Need + Use it to the Fullest!

Don’t let your working capital loan do all the work when your business is struggling to stay afloat. Maximize it, increase your capital, and allocate your resources where you can get returns as quickly as possible.

If you need a lifeline to keep your small business’s doors open, you can find a solution here at Probably. We are a financing company offering flexible, innovative, reliable, and transparent funding options for small businesses.

Contact us to apply for your small business working capital loan.

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Flattening the Curve of Cash Flow Gaps After COVID-19

Man solving Cash Flow problems

Today, business owners face plenty of rough patches due to the COVID-19 pandemic. Self-isolation measures, social distancing rules, and travel restrictions have resulted in the suspension of operations and substantial declines in sales.

In the face of a pandemic, business owners now struggle with cash flow gaps. The closure of brick-and-mortar-stores, failure to fulfill customer orders and collapsing supply chains cause incoming cash to plummet, which could result in a negative cash flow. Because of this, many business owners are creating strategies, applying for a merchant cash advance (despite their bad credit) or downsizing the workforce to weather the current consequences and potential aftermath of the pandemic.

Understanding the Immediate Problem

Drops in sales cause the cash wheel (a tool that generates that required liquidity to operate a business) to slow down or stop. When sales continue to drop, the cash flow dries up. If you cannot stop the drop, cash outflows (payments for raw materials, salaries or supplies, merchandise, interest, and rent), cash reserves, and other lines of credit will be used up, resulting in a cash-flow gap.

The Reality of Sales

No cost, no sales — this is a reality business owners face. Retailers need to buy products or invest in services they can sell. The inverse of “no cost, no sales” (no cost without sales) is not always true for two reasons: time delays and a fixed cost.

In terms of costs, there are two types: fixed and variable. When sales drop, the variable cost drops too since lower sales volumes require fewer labor and materials — therefore, fewer payments. On the other hand, fixed costs remain in place and are more difficult to change. For example, you still have to pay rent even if your store is slow or has shortened hours, or even closed for weeks at a time!

Plus, variable costs do not disappear. As a result, business owners experience a rapid and sharp decline in their sales. Payments never stop when sales stop, which emphasizes the need for immediate action to prevent cash flow gaps.

How to Beat Cash Flow Gaps

Reduce Costs as Much as Possible

Assess your finances for the time being and consider reducing costs in non-essential areas. Start by listing your variable and fixed costs to start cuts. Depending on your current business model, ask yourself the following questions:

  • Can you temporarily cut the staff’s commission and offer a different incentive?
  • Are there alternate and more affordable ways to ship your products?

Also, consider how you can change fixed costs into variable ones. For example, consider cutting computer and maintenance costs to save more.

Prioritize Generating Cash Over Turning Profit

Profit doesn’t always equate to positive cash flow. What you need is money right now, so speed plays a factor as well.

If you have already tackled cash flow strengthening tasks (e.g. cutting variable costs), it’s easy to adjust your profit-generating actions toward cash-generating goals. Consider the follow cash-generating strategies:

  • Repackaging services or products for a consumer market. Many products reach consumers via a middleman or sold to businesses with office spaces. Encourage marketers to unleash their rebranding creativity and create a simple landing page to get your products in front of customers.
  • Offer exclusive discounts to customers. Acquiring new customers is more expensive than keeping the ones you have. Keep in mind that your current customers are bursting with pent-up demand. If you offer the right discounts with a compelling ‘exclusive’ message, you can boost sales and generate immediate cash.

Probably Wants to Help Your Business Not Only Survive – but Thrive!

The pandemic may have challenged the financial stability of your business, but there is no storm you can’t weather. Proper planning, budgeting, and strategizing can keep your business afloat until the time it’s “business as usual” again.

If you need assistance with your finances, Probably Yes is at your service. Call us today to learn more about our small business loans.

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Working Capital Loans for Businesses with Bad Credit

Working Capital Loans on a laptop

Cash flow in any business is a big deal, but your working capital gives you the financial capability to handle one-off emergencies. When a piece of equipment breaks, when there’s a sudden shortage in supplies, or when you take on a new business endeavor, you need access to money that won’t affect your bottom line. This is why owners of many small businesses apply for working capital loans.

But how do you get a loan for your business when you have bad credit?

When your credit score falls under the “fair” to “poor” credit rating system, lenders will classify you as a risky client and reject your loan applications. But this doesn’t mean you are out of options. There are other types of business loans available to you, regardless of your credit score.

Working Capital Loans for Businesses with Bad Credit

There are lending options that don’t require a high credit score. Some lenders are more understanding of the causes of bad ratings, especially in business.

Line of Credit

This is considered one of the most popular working capital loans. When you apply for a line of credit, the lender will define the amount you can access. You will be given a repayment plan that indicates when to make payments and how much interest will be charged down the line.

Factoring

Also known as factoring receivables, this type of loan uses your unpaid customer invoices as collateral. Although you retain legal ownership over the outstanding invoices, failure to keep up with repayments gives the lender the right to take over.

Micro-lending

Micro-lending is a type of peer-to-peer financing model where you approach individuals instead of financial institutions for loans. More businesses are applying for this type of loan, but it presents several risks to borrowers, including higher interest rates and longer application periods.

Online Business Loans

The digital landscape has created a new environment where individual lenders are more accessible. Most online lenders will look at your business performance rather than your credit score, making it easier to apply for a loan.

Merchant Cash Advance

This isn’t a loan in the technical sense, but it acts similarly to one. In this financing model, the lender looks at daily credit card receipts to determine if a business can pay back funds in a timely manner. Basically, a small business “sells” a portion of future credit card sales to acquire capital immediately. Most cash advances require daily or weekly repayments.

Probably: Your Financing Partner in Business

Business loans for bad credit exist, but you have to find the right lender to apply for one. Probably understands the struggles small businesses face when applying for loans and we believe every business deserves access to capital.

We have a three-step process for our business loans:
  • First, you need to fill out our online application form.
  • We will then contact you to discuss your business, its needs, and the appropriate financial plan for it.
  • Once we’ve approved your application, you can get your funding as soon as possible.
probably loan options

Get in touch with us to learn more about our financing options for small businesses with great, good, average, even bad credit!

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What Makes the Best Small Business Loans for Startups

Group of startup owners applying for small business loans

At Probably, we believe cash flow shouldn’t keep you from reaching your business goals – no matter the size of your business or its age. Small business loans and startup loans through Probably are meant to give you the freedom to grow your business the way you want.

Our customers can use their small business loans to invest in equipment, bridge gaps in payroll, new developments, marketing, expansions, and more. Unlike traditional big bank lenders, we want to help you grow your business faster without all the hoops to jump through. That’s why we offer quick small business loans and alternative business funding solutions for startups, expansions, as well as small and medium businesses.

Learn about how we’re different, and how we put you first with our easy application, our speed and communication, and our approval ratings!

Our Easy Application:

No endless hours of signing your name here! Probably made the conscious decision to be an easier and better small business loan option, and we started it by making our small business loan application just one page.

That’s right, one page. Our application can be filled out in just a couple of minutes. Then, we will contact you to get to know your business needs and how we can best help you.

Just fill out our application, speak with one of our team members, and be on your way to the small business loan you need. Short, simple, and sweet, just like we think it should be. Every step of our process was created to make applying for a small business loan simple, transparent, and accessible. Because we believe that simplicity and clarity are the best practices in any industry, but especially when it comes to your money and your business.

1. Fill out our online 1-page application.

2. Provide three months of your business’s bank statements

[Not 6-18 months like most big banks require]

3. Talk with us so we can get to know you and your business.

Our Speedy Credit Decisions:

Probably has always worked hard to be a fast and reliable option for small business loans.

After all, what’s the point in waiting weeks or months for a credit decision or your business funding when you need it now? Instead of the runaround and waiting game, Probably can fund your business in as little as one business day!

We didn’t just come by our reputation of providing quick small business loans by accident. Our credit decisions are always rendered quickly, so you can get the working capital you need when you actually need it.

What good is a small business loan if it comes too late?

Our Credit Decisions & Approvals:

We want to partner with you and your small business to find the perfect loan or financing products for your funding needs. Whether you need a working capital bridge loan or something more unique for equipment or expansion, our small business loans can get you the working capital you need with much higher approval rates than the ‘big banks.’

Banks often refuse to help small businesses and startups, or they say they will help but have such lengthy, complicated processes and applications that they still really aren’t trying to help.

We decided to offer small business loans and financing options that actually work for small businesses.

We want to drive small business growth through our small business loans, startup loans, and working capital loans, and that means we want to approve your request! Unlike banks who refuse most applications, we pride ourselves on working with every application, business, and client on an individual basis to find the best financial product, service, or option that will work for them.

Contact Probably for Your Small Business Loan or Startup Loan Today!

If you need working capital or a small business loan quickly, and you don’t want to spend a whole workday filling out paperwork just to get denied, then contact Probably for your small business loan today!