At times, many business enterprises may experience situations where they need extra liquid funds to tide over a short-term cash crunch or a bridge a slow-moving season. To avoid embarrassing financial challenges like returned cheques or overdrafts, it is prudent to have a meaningful cash flow cushion in your bank account. Moreover, there may be situations where you do not have enough liquid cash to cover unexpected expenses. Therefore, you need a temporary cash flow loan to overcome the situation.
It may not always be a challenging situation where an entrepreneur needs a temporary cash flow loan. There may be an opportunity to expand his/her business by purchasing inventory at a discount or launch a much-needed marketing campaign. A temporary cash flow loan may not be the ideal financial solution for every entrepreneur, but it will be beneficial for those healthy business enterprises that need temporary cash. Moreover, these enterprises have the ability to repay such loans within a short period. Temporary cash flow loans may have a higher rate of interest but considering the speed and convenience with which you can get liquid funds, it may be worthwhile.
The type of loan that an entrepreneur should avail will depend upon the nature of his needs. For instance, the needs a of business proprietor looking for a temporary cash flow loan will be different than when he/she is seeking a financial facility to purchase new equipment. As long as the entrepreneur knows that he will be able to generate the necessary revenue within the expected period, taking a temporary cash flow loan makes sense in spite of the cost.
A business owner may choose to borrow a temporary cash flow loan for a variety of reasons but some of the most common situations where business owner requires such a loan:
- Overcoming a short-term seasonal cash flow problem
Many seasonal business enterprises may require extra liquid funds before the start for busy season or during a slump in their markets.
- Unexpected expenses
It is common for businesses to face financial situations where they do have enough cash funds to meet unexpected expenses like a major maintenance issue.
- New project start-up costs
At times, there may an opportunity for a business enterprise to start a new project that is likely to generate more revenue in the future. However, the additional resources for the project may exceed the enterprise’s present cash flow. In such a situation, it will be prudent to opt for a temporary cash flow lending.
- An opportunity to purchase inventory at a steep discount
For an entrepreneur, opting for a temporary cash flow loan is an ideal way to take advantage of purchasing inventory. This is especially so when such inventory has the potential to generate additional revenue.
- Emergency repairs to business-critical equipment
When equipment necessary for business operations breaks down, it does make sense to delay the repairs by several weeks. In such a situation, it is more prudent to opt for a temporary cash loan and start repairs immediately.
At ABR finance, professionals understand that you need a temporary cash flow loan; you do not have the luxury of months or weeks for business loan. This is why able to provide instant cash flow lending and have the money in your account with 24 hours.