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4 Common Commercial Finance Challenges

Posted by Aaron Zahedani on Fri, May 22, 2015 @ 08:00 AM

As your business grows and becomes more successful, you may encounter some common commercial finance challenges that are regularly faced by every company. Did you know that some of these challenges could be solved more easily than you think? Often, companies face one or more of the following situations: Commercial Finance challenges

  • Cash flow interruptions
  • Changes in business
  • Unexpected rapid growth
  • Expected planned growth 

A potential answer to each of these four business dilemmas can be found in a new guide from Bay View Funding, which examines each challenge in a little more depth. 

  1. Cash flow interruptions can often occur when you have plenty of accounts receivable due, but your customers are slow to pay. Keeping up with your operating costs is obviously extremely important. You may need help turning your unpaid invoices into cash when it comes to organization, the terms you have offered customers, the types of payment you are willing to accept, and how you follow up for the collection process. However, you may want to consider a commercial finance solution that allows you receive money now for invoices due to be paid in 30 – 90 days. 
  1. Changes in business may be small and seem to have no effect on the day to day running of your company, but the results of even the smallest change, such as losing one customer, may add up over time. Should one key customer, or a few smaller customers decide to purchase from your competition, you potentially lose a level of stability even with new prospects on the horizon. If access to funding is limited, it can quickly become hard to pay the bills. Securing money from traditional sources may become difficult. It would help to feel confident that expenses could be met if you could secure a solution that would allow you to cover the short-term effects of unplanned business changes. 
  1. Unexpected rapid growth sounds like a great ‘challenge’ but there are often critical issues such as the need to operate more quickly to meet demand, expand capacity, and purchase inventory. Customers have to remain satisfied otherwise you will hear about it, as will everyone else! A lack of immediate working capital can create many problems. Scaling at a steady pace is the preferential way to grow, but when the demand for your product or service suddenly increases, you need to find an answer quickly. The ability to get cash quickly for outstanding invoices is one way of helping with rapid growth. 
  1. Expected planned growth is most certainly the optimum way to reach your business goals. Planned growth may be simpler to manage than an unexpected surge in business, but it still demands a steady cash flow. Planned growth takes many forms, such as extending your range of products, expanding your facilities, or even acquiring or merging with another company. A solution that allows you to cover operating costs and allows breathing room for planned growth that uses money owed as collateral would be a useful tool. 

It pays to keep a close eye on your working capital, no matter what solutions there are to help you along the way. Alternative funding options such as invoice factoring can provide a simple answer to your finance challenges more easily than you think. Contact Bay View Funding to find out how invoice factoring might be able to help your company.

4 Common Commercial Finance Challenges

Topics: Cash Flow Solution, Commercial Financing

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