When seeking for funds to start a business or run the day to day operational cost of a start-up, a small or medium-sized enterprise (SME) may opt for various capital solution methods. Capital solutions provide funding when the business requires it most and it cannot generate profits and sometimes the required operational costs.
Available Working Capital Solutions
The Working Capital options that you can consider as a business include;
Trade creditors or suppliers
Having good suppliers can boost your working capital in your business too. This can be informed of trade credits extended from an example from 30 days to 60 days. This, however, has to be supported by a proof of order as a means of promise to pay. Regular business with the customer can also increase creditworthiness thus cannot apply if you are still very new to the market.
Getting trade credit from suppliers also means you need to pay them once the agreed period is over, lack of this can lead to penalties or disqualification another advancement. Dealing with different suppliers may also be quite difficult as others may compromise the agreed terms or require higher interest to the money advanced.
Sharing Business Equity
You can either choose to finance your business needs from your saving or request family and friends to chip in and finance the business. This, however, can be a very tricky form of investment as you can lose your savings or end up in a bad relationship with the owner of the funds. This is because you might not have explained well to the third party investor about the risks and activities of
the business and they might not understand how the business works
A Line of credit
Banks may offer you loans too. A line of credit considered the friendliest loan to new business can be accessed although you will need a good credit history to get a bank loan. A line of credit also may take a lot of time to process and require paperwork such as supporting the application with documents such as the returns and the projected cash-flow statement of your business.
A short-term Business loan
Short term loans can be another form of acquiring working capital although this can the most expensive solution. This is because short-term loans are usually very highly priced with interest that can keep you locked up in the short term loan cycle. This can drain your profit margins and even exhaust your business thus should be considered as the last option.
Invoice Factoring can be a very workable solution to your financial needs. As this is not a loan you can submit all recoverable invoices to another company which will go ahead and collects payments later. This can be an option for accompanying where working capital is required urgently yet there is no liquid form of it.
At momentum Credit businesses in Kenya can access Invoice Factoring of up to 85% of the invoice receivable and can be extended to a period of 60 days. By providing this solution Momentum Credit fills the market share left by other banking and microfinancing solutions which do not support small and medium-sized businesses (SMEs) in general citing their lack of creditworthiness.
A Logbook Loan can also provide workable solutions for your businesses especially when it is just starting out. This is because it is fast, easy to acquire and does not require any collateral Logbook Loans offered by momentum credit Limited can extend up to 50% the value of the car and can cover up to 5,000,000.00. We also offer the loan at a time less than 24-hour offering convenience and
urgency in case you need cash in a short period of time.
At momentum credit, all the business needs of the new and small business are catered for. This is because momentum credit has focused to assist them in funding, a provision that is rare to businesses at this growth level. By accessing Quick cash small business are not at a risk of collapse of facing unfair competition from bigger business as it can adapt to the market needs and have a source of alternative cash access just as the other businesses may have.