Funding Challenges a Small Business Can Face

January 26th 2020 at 2:52pm Published by sharpshooteradmin

Funding Challenges a Small Business Can Face

To say that small businesses are an important part of the Canadian economy would be an understatement. It’s estimated that nearly 98% of all businesses in the country are small-sized. They employ over 90% of the private sector workforce and contribute an average of 30 percent to the gross domestic product (GDP) of their province.

Despite their significance, small businesses can face many challenges along the way, especially in terms of funding. Overcoming these challenges can require some creative thinking and flexibility.  

Funding for the Long-Term Future

One of the biggest challenges small businesses face is long-term funding. When applying for traditional bank funding – they can run into frustration, especially if their business isn’t generating millions of dollars. To approve an application, a traditional bank may ask for a long history of success, an impressive credit score, collateral, and other documentation. Moreover, they also take a long time to process these applications before either rejecting them or taking more time to provide the funding.

Long-term Funding from sharpshooter funding specialists can help your business keep up with lasting growth and meet your needs several years down the road with amounts up to $250,000. The benefits of this are interest rates that are lower than short-term alternatives, smaller return payments, the ability to improve your business’s credit as you return the money, and the stability to maintain growth.

Your business can use these funds to hire new staff, purchase inventory, upgrade your equipment, invest in marketing to draw more business, and bid for more contracts.

While short-term funding can be a life-saver for Toronto companies that need to deal with issues like unexpected revenue shortfalls or emergency repairs, if you want your business to be able to keep pace with growth over the long-term, you need funders who can provide you with financial arrangements designed to meet your needs three, five, or even ten years down the road. 

To qualify, your business must be 12 months old with $120,000 in annual revenue. You must also have a personal credit score of 620.

Funding to Fill the Gap

Many new small business owners underestimate hidden expenses. Even after securing funding, they may find themselves in a temporary financial crunch while waiting for the next deposit from the bank or a customer to clear an invoice.

For example, a small business owner may not have factored in the cost of insurance, taxes, and city permits. Perhaps they need money for small repairs, or their goods were lost, stolen, spoiled or damaged. They could also face cash flow problems because of a disagreement with a customer.

Likewise, small businesses sometimes lack the funding to capitalize on unexpected growth opportunities. For example, a seasonable business may need to acquire more inventory to take advantage of a surprisingly busy season, or perhaps they need to invest in another lucrative opportunity that will produce more income.

Getting more funding from the bank can sometimes be impossible. A good option for such businesses is to apply for funding online on our easy-to-use platform to access SharpShooter Funding’s bridge funding. Because these are smaller short-term funds, they are low-risk, easier, and faster to obtain. They’re also more flexible than other programs. A small business can spend a bridge fund as it sees fit and has more freedom to determine when it can pay it off.

Funding for the Short-Term Future

A business that’s showing promise in terms of growth and returns can still need funds on short notice. If it needs more than bridge funding but less than long term funding, it can utilize our short-term business funding program. This can be paid back anywhere from three to 18 months.

This type of funding comes in handy in big cities like Toronto where businesses can experience unexpected issues such as a shortfall in revenue or product development delays. Fortunately, with SharpShooter Funding, small business funding in Toronto can be quickly and easily accessed by applying on our website.

While SharpShooter Funding is a good option for businesses that need a small amount of capital quickly, there’s a caveat. These funding are considered riskier because they’re more expensive. What’s more, it’s not uncommon for the creditor to ask for payments on a weekly or daily basis. That’s why businesses applying for such funding should consider them carefully. If a business is unable to make these high-interest payments, then it should explore more flexible options.

Funding to Propel Growth

A common problem for many growing small businesses is to know when to take their company to the next level. A company that has been in the business for over three years receives more than $20,000 in average monthly deposits and has over $3,600 in average daily balances with a healthy credit score may believe that it’s ready to expand, especially when presented with an unexpected growth opportunity.

However, this can be a complicated endeavour. To expand, such a business needs funding, especially when its capital can barely keep up with growth. For example, it may not have the infrastructure, employees, inventory, equipment, and space to keep up with increasing demand or to develop a new product required by its client.  

At SharpShooter Funding, we offer expansion business expansion funding to help such businesses. With this program, businesses can design new products, increase their marketing budget, open at new locations, train new staff, and upgrade their technology. We provide large-scale growth capital at competitive costs with flexible repayment options. However, we will assess your business and its short- and long-term objectives before delivering the funds.

Your company must have a business plan for the money. You should have a firm idea of where you’re investing and what you expect to generate in return with forecasted revenue and growth.  

Funding to Build Credit

New small businesses often have no or poor credit, which affects their ability to secure funding of any size on any terms. At SharpShooter Funding, we have options for such businesses. They can build their credit by accepting smaller funds that can be repaid quickly. As these businesses establish a record of repaying their funding, their credit grows.

These are some examples of funding challenges many small businesses face. Fortunately, at alternative funding providers like SharpShooter, there are short-term and long-term options that can help businesses in a variety of situations.