July 27, 2021
5 Small Business Challenges and How Working Capital Helps
With so much responsibility, small business challenges will arise, and many of them require financing in order to be resolved. That’s where additional small business working capital comes in! Having access to a loan or business line of credit can help your business overcome even the biggest challenges.
Editor’s Note: This post was updated for accuracy and comprehensiveness in July 2021.
The Top Challenges That Business Owners Face:
As a business owner, you’ll likely face challenges on the road to success. Not having necessary capital will only exacerbate these issues further. In this post, we’ll review five common small business challenges and explain how having access to financing can combat these issues. It's crucial to consider these challenges before starting the application process. This is because your business's situation could affect the type of funding you pursue.1. Limited Cash Flow
Running a small business entails paying for a wide variety of consistent costs. These business expenses can be paying rent and other bills, purchasing inventory, compensating employees, in addition to other operating expenses. These costs can add up quickly, especially when you have other monthly payments make. This is why many business owners find themselves lacking extra cash flow for last-minute costs. For instance, maybe you run a restaurant, and an oven suddenly breaks. Or, perhaps you own a retail store, and you’d like to invest more money into marketing campaigns. On top of these initiatives, you also have to pay rent, meet payroll, and afford your other monthly expenses. Without working capital financing, you won’t be able to execute these plans that are necessary to your success. By applying for business financing, you can save some of this financing for when your business is in need! In addition, you won’t have to cut funds from certain areas to afford emergency costs or growth plans.2. Overworking Staff Members
Having happy employees matters when running a small business. If you’re short-staffed, your employees’ performances will likely decline. Don’t risk over-working your staff, or they might seek a new job that offers a better work/life balance. In addition to overworking employees, being understaffed can also affect your business's productivity. It’s exciting if your business is receiving an influx of sales. However, it’ll be hard to manage if you don’t have enough employees on-staff to serve your customers. Apply for a small business loan, and you’ll be able to hire some new faces to join your growing team.3. Having Broken or Outdated Equipment
It can be extremely stressful to have your business’s equipment or tools break. Even if the equipment isn’t broken, you might be working with outdated equipment that isn’t performing well. By neglecting these repairs or updates, the quality of your service or products may suffer. Due to this, your business would benefit from additional working capital to replace broken equipment or afford regular tune-ups.
