Bay View Funding Blog

Small businesses need to be funded, and it appears that the options for funding are opening up. Let’s consider the small business loan option, and what you will need to provide to your lender when applying.

An article in SBA News very clearly sets out what needs to be addressed when your company decides to apply for a business loan. The most common forms of small business financing can be found through a bank or a government agency such as the Small Business Administration (SBA). The most important requirement is that your company must be financially able to cover any obligations despite any hiccups along the way. It is vital to maintain good credit standing and excellent business relationships with both customers and vendors

Poor cash flow management; it is the Achilles heel for many small businesses. It is always hard when your customers pay late, but if you effectively manage your cash flow, late payment shouldn’t mean disaster. It pays to be prepared!

Let’s face it; there is a lot to think about when starting a new business. It is common business practice to take on long, and short-term debt to help finance operating expenses, especially as you start out and as you begin to grow. This debt needs to be managed and utilized in a way that will encourage success, not bog you down in the debt mire. It certainly feels great when you realize your company has grown enough that you can balance your accounts payable with your accounts receivable. But then it is time to grow again and this is when cash flow management becomes even more critical.

What methods of payment do you accept from your customers? The more payment options you are prepared to accept, generally the easier it is to receive an on-time payment. Make it as easy as possible for your customers and therefore for you.

We love explaining the benefits of accounts receivable financing, and how it is an effective tool for all sizes of business, but there are other tools worth considering. Another way to help start-up businesses in their infancy is the use of a credit card. A recent ‘how-to’ guide in the online edition of the Wall Street Journal, discussed how to pick a credit card for your business.

When a line of credit from the bank is not yet forthcoming, and those first few invoices are not yet large enough for you to qualify for invoice factoring, a credit card may be the answer as a stopgap measure. This also establishes initial credit in the business’s name.

If you were to ask small to medium sized trucking companies what it is they consistently struggle with, the frequent answer would be covering fuel costs while on the road.

Customers can often take many days to pay their invoices, depending upon the agreement in place, or sometimes just because they pay late. Late payment means less money to pay bills and cover operating costs. Filling up with fuel to deliver a load is a fundamental cost, which has to be covered in order to deliver the load. With the fuel advance program from Bay View Funding, the working capital needed to cover the cost of fuel can be obtained prior to load delivery. This means no more worry about fluctuations in gas prices, or decisions about which bills not to pay to make sure the gas cost is covered.

In my last blog with Andrew Aquino, Executive Vice President at Bay View Funding, I mentioned that we would be chatting about the warning signs to look out for with some of the newer financial offerings on the market. Andrew also covered some of the major benefits of accounts receivable financing.

I recently spoke again with Andrew Aquino, Executive Vice President of Bay View Funding about invoice factoring, and how it compares to traditional bank loans or lines of credit, and some of the newer forms of financing on the market today.