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Attention CFOs: Here’s how to protect your business through uncertainty

mayo 3, 2021/en Biz Tips, Sin categorizar, Business Growth/por Rubain Manzoor

As the world slowly starts to reopen, focusing on these four areas will be critical for CFOs and business leaders.

Running a business is difficult. Factor in instability and socio-economic challenges influenced by an ongoing pandemic, and it becomes downright impossible. But there are so many organizations that are persevering, regardless of the many challenges created in the past year.

Business leaders are using these hurdles to create new opportunities, shift gears and improve processes. They’re leveraging change — if they have the agility to do so — and protect their business through uncertainty and risk.

This is particularly true for the finance role. More particularly, CFOs must be prepared to mitigate risk for their organization in both the short and long term. Here are key ways finance leaders can adapt and manage that uncertainty:

Plan business around liquidity

CFOs can overcome some uncertainty by making strategic real-time decisions that focus on the most urgent liquidity needs first. Naturally, leaders need to take immediate action to preserve cash flow, so prioritizing business needs will help focus your attention.

> What can leadership do to raise more capital?
> Can we get a loan to cover expenses and operational costs?
> How can we speed up our invoice payments?

Partnering with a lending company that always has your back and can support you with speed and precision is important. It’s like having a special phone line to capital.

Liquid Capital (as our name suggests) offers funding to businesses that need to meet business demands without adding more debt to their books. Using invoice factoring, businesses can sell unpaid invoices from credit-worthy customers and inject capital into their organization. This enables them to adapt to change quickly and meet the pressures of doing business today.

For example, Best Broadcast, a fast-growing AV company based in Toronto, Canada, uses factoring from Liquid Capital to overcome cash shortages in slower months to pay for operational expenses and employee wages.

Adopt a hybrid work model

The entire world has been working remotely for the past year. But as the world slowly starts to reopen, we’re seeing many companies bring on a hybrid work model to their organizations. Now, companies are offering their employees the chance to choose where they want to work from — the home, office or both — and many are choosing to adopt a hybrid work model.

From a financial perspective, it makes sense for CFOs and business leaders to shift to a work setting that encompasses the best of both work modes (remote vs. in-office). When you have fewer people in the office, you’re not just cutting down on rent for bigger office space but also reducing the costs associated with keeping every employee in the office. Think office supplies, utilities, and those fully-stocked kitchens!

A recent survey indicates that 84% of CFOs and business leaders in a traditional work setting plan to bring employees back in waves, while 5% plan to keep employees working from home permanently. Obviously, the preference changes from company to company, so it’s best to analyze how much it would cost to take on a hybrid work model and offer flexible work opportunities to employees after running the numbers.

Use technology to upskill and reskill roles

In a world that is becoming more open to automation, finance has an opportunity to transform from being the gatekeeper of transactions into a strategic guide for their organizations.

This means helping teams upskill or reskill to manage macro-challenges and truly transform into a modern workforce for the CFO. The emergence of machine learning and data-driven technologies can drive up change and financial leaders should adapt their role to welcome more AI-based tools.

New technologies can streamline manual processes and help them make strategic business decisions with a long-term approach. Instead of being scared of robots or machines to take over the finance department, CFOs can also use emerging tech to predict the need for cash flow better and forecast any business funding needs that may arise.

Build trust and transparency

Transparency is key to doing business today. And finance has its part to play in building trust and clarity among customers and stakeholders in their company.

CFOs can do this by using up-to-date data from different sources and business functions and delivering central insights to everyone involved in an organization to drive better participation and enhanced decision-making. It’s vital that CFOs notify stakeholders about the measures they’re taking to protect cash flow and outline tactics to ensure preparedness during uncertainty.

Business leaders and CFOs can ensure consistency when it comes to being transparent and honest:

Communicate regularly with employees about how the company is doing, changes that will go into effect to tackle uncertainty, and how it will influence them or their roles
Inform suppliers and vendors of real-time changes to avoid interruptions to their services
Bring up to date lenders on the need for cash flow and discuss discounts you may need in the present or the future
Speak with investors to gain strategic insight and access financial support

Why change matters

Making agility the number one priority while supplying the organization with the right tools and direction to make better decisions is critical. And grasping how finance will achieve what the business demands — from any location — along with a heightened need for trust and transparency is imminent.

But perhaps the most important is the need to reshift your business operations to focus on liquidity and the willingness to inject capital by partnering up with a lending partner, such as Liquid Capital, when required.

To find out how we can help, get in touch with us today and get access to your own money through invoice factoring.

future business funding - alternative lending

What does the future of business funding look like?

abril 23, 2021/en Sin categorizar, Business Growth/por Rubain Manzoor

The pandemic has changed the way businesses operate — including the finance industry. Some financial institutions have become more conscious of consumers and businesses during the past year and have pivoted to offer greater flexibility, support and leniency to borrowers. However, other businesses have experienced the opposite — with greater challenges accessing capital.

We’ve already seen the change come into effect in some parts of the world. In Canada, central banks have cut interest rates extensively, offering historically low borrowing rates to boost economic activity. In the U.S., mortgage lenders saw a rise in refinancing applications as the Fed lowered interest rates down to 3.45%.

But the changes brought to the financial sector go beyond slashing rates and offering more favourable borrowing terms. For leaders and CFOs of small and medium-sized businesses, this means they should be prepared to shift gears within their organizations and embrace the following future business funding trends:

1. Digital transformation

The banking industry is more keen than ever before to adopt technology that will help them assess credit-risk factors for borrowers and automate much of its underwriting processes.

Similarly, many business and finance leaders in small businesses will be investing in technologies to help them better plan and prepare for cash flow and manage expenses.

According to PwC, nearly one-third of CFOs surveyed already look to tech-driven products and services to revamp their business in light of COVID-related restrictions and allocate cash flow where it’s needed the most. Using digital savvy-tools, CFOs can better predict when they’re likely to experience slow cash flow months and apply for funding strategically.

2. Alternative lending

The harsh reality of the pandemic is that banks are only lending to SMBs with no risk at all.

It is a daunting task for businesses, which often have low-to-moderate risks associated with their organization, to receive funding from traditional financial institutions. Last year, about 70% of U.S. small businesses owners applied for the Cares Act Loan (backed by the Federal government but executed by banks) but it’s still unclear how many actually received any financial support. This is just one example of how banks run on a risk-averse basis.

Instead, alternative lending companies have stepped in and reshaped SMB funding, helping to bridge the gap that traditional bank lenders cannot fill. Lenders such as Liquid Capital build relationships with businesses based on trust, knowledge, experience and expertise. This way, SMBs always have access to capital without having to go through a long drawn out process, without knowing if they’re even eligible for a loan or not.

3. Business funding will become more agile

Doing business is not just about getting your products to market — it’s also about protecting your cash flow. If you don’t have access to working capital, you can quickly fall behind on payments and find yourself in financial trouble before you know it.

In the U.S., 50% of companies now consider themselves under severe financial strain and millions have indicated they may have shut their doors for good. To help these struggling businesses, the banking industry will need to find creative, versatile solutions.

Many banks have started working with alternative lenders, such as Liquid Capital, and refer clients who don’t meet their underwriting standards to us. We are happy to work alongside our colleagues in the traditional banking system to ensure business owners, CFOs and leaders get the right product to keep their business healthy.

Our business funding services and products, including invoice factoring, asset-based lending, PO financing and other solutions, can be leveraged during various stages of business. During good times, this can further increase cash flow and help leadership make strategic moves. In downtimes, these solutions can help companies bounce back or prepare for an emergency by maintaining their cash flow during disruptive economic environments.

When you work with Liquid Capital to leverage invoice factoring (one of our main solutions), you get access to money owed to you through your open invoices — and get paid sooner. Many SMBs who are more familiar with traditional funding such as business loans and lines of credit are surprised to learn that invoice factoring does not add debt to your books. Instead, it quickly injects capital into your business.

Is your business prepared for the future of business funding?

As business leaders and CFOs consider how to prepare for the many changes the future will bring, the time is now to adopt new technologies that will help them streamline their cash flow, develop relationships with alternative lenders so they always have access to working capital, and be prepared for change and disruptions.

How do you pinpoint amazing funding companies? (Hint: It’s the people)

marzo 24, 2021/en Alternative Finance, Sin categorizar/por Rubain Manzoor

Look out for these human-centered characteristics from great funding companies.

As a business owner, what do you look for when starting a new partnership with a lender? You’ll take the obvious parameters into account — such as their ability to fund your business. But how often do you establish relationships based on a human-centered approach?

It’s easy to forget that real people are behind funding companies because you may not always have faces put to names (especially online lenders). But there are funding companies out there who take a more personal approach, including us at Liquid Capital. We are rooting for our clients and their businesses to succeed, and we want their teams, revenue and profits to grow.

Next time you’re searching for a funding partner to invigorate your business cash flow, these are some of the additional characteristics you should look for:

Great funding companies build relationships

A funding company that looks beyond dollars and cents is someone worth partnering with. Look for someone who can follow your struggles and understands what you’re going through, especially in unpredictable economies.

At Liquid Capital, our ability to connect with clients at a human-level based on trust, experience and knowledge is what makes us stand out from our competition. Instead of developing one-way access to lending, we promote a reciprocal partnership that encourages business owners to lean on us for anything business-related.

One day we might be assisting our client in finalizing a new supplier. The next day, it could be supporting them to open a new warehouse location. It’s involvement like this that makes us stand out and puts us at the heart of business funding today.

Great funding companies understand the immediate and future needs of business owners

If your business is going through a cash shortage, chances are you need the problem resolved ASAP. When you work with a funding partner, they should perceive critical business challenges and provide timely and convenient solutions.

But a great lending partner will also try to identify why there was a working capital gap in the first place — and anticipate future funding needs. In this case, their goal should be to offer continued support so you can rely on them to help you meet ongoing challenges.

Great funding companies are industry specialists

At Liquid Capital, we have experience and practice in almost every industry and market. Working with a lending partner who understands specific industries will significantly benefit you — and not just in terms of funding.

Not only do they know the ins and outs of how particular markets work and how invoice factoring can be beneficial, but they can also use their knowledge to resolve problems and offer strategic insight.

Great funding companies are willing to ask the hard questions

It’s important to work with a provider who’s ready to ask difficult questions to learn more about your business and see if there’s a fit.

Are they inquiring about your credit score? Do they ask about past bankruptcy filing or insolvencies? Have they figured out if you’ve been making payments on time? Will they delve into the health of your relationships with vendors and clients?

Although it may be awkward to answer these questions, they’re willing to learn more about your business so they can lead you to a funding solution that’s affordable and wise.

Great funding companies will educate you

Ideally, you want someone who will offer you advice and feedback to help you grow your business. After learning more about your operations, they can pinpoint what’s working and acknowledge areas to improve productivity and output.

Equipped with industry knowledge and experience, we help clients achieve a firm position in the market by continually educating them on best practices and answering questions that fuel business growth.

Great funding companies are realistic

We know it’s hard to hear ‘no’ if you’re in need, but a responsible funding partner won’t be afraid to decline an application request if it doesn’t make a good fit for your business. If that happens, they should also provide practical feedback on what you may need to adjust to qualify in the future.

Likewise, if you’re applying for a particular funding product but another solution is better for you, they should offer that advice. You don’t want to be working with a company that will sell you a service that’s beyond your affordability or does not provide the optimal solution to your funding challenges.

Great funding companies have proven success

Successful lenders can showcase results in the form of case studies, recent fundings and client testimonials. Don’t be afraid to ask them how they’ve helped clients achieve their goals, overcome a unique problem, or enjoy growth with their support.

At Liquid Capital, we walk the talk. Here are some of our success stories that prove why our clients love working with us and how we help them achieve their business goals.

Funding is about more than just numbers

Liquid Capital is committed to the long-term success of SMBs and we realize that doing business is about more than earning money. (Naturally, that is important, and we want you to be as successful as possible!)

But business is also about making genuine connections, helping clients beyond their expectations, and working together with a more inclusive approach. With all the qualities listed above, we’re confident that our clients have the support to grow their business.

At Liquid Capital, we understand the struggles and challenges of small, medium and emerging mid-market businesses – because we’re business people ourselves. Our company is built on a network of locally owned and operated Principal Offices, so whenever you’re talking to Liquid Capital, you’re talking directly to your funding source and a fellow business person.

How to ask for invoice payments the right way—and get paid

marzo 17, 2021/en Sin categorizar/por Rubain Manzoor

Your business survival depends on a positive cash flow.

As a business owner, you probably have some favorite clients. Those people you can call up and chat with about business easily, but that you also get to know on a personal level. The ones who have grown professionally alongside you, having battled through the highs and lows together. You may have both developed a mutual loyalty.

So what happens when a client doesn’t pay on time?

Even if you want to remain loyal to a non-paying customer, unpaid accounts can negatively affect your cash flow. And without any cash reserve, you may struggle to keep up with overhead expenses.

Your employees, suppliers and vendors also need to be paid every month, and if your client payments fall behind, you’ll experience an even bigger working capital crunch. If you’re unable to effectively run your business because your clients aren’t regularly paying you, it’s time to do something about it.

How to ask for invoice payments the right way:

If you’ve implemented the above tactics to avoid non-payment but still have clients that refuse to pay you, consider the following:

Get in touch with the main point of contact personally.

Before taking any drastic measures, pick up the phone and call your customer to have a one-on-one conversation with them. In some cases, your team may have been messaging their Accounts Payable team, but the owner, decision-maker or your key contact may not even realize that payment is outstanding.

Verbally remind them of any outstanding balances, and notify them of any late fees that they’ve incurred or will continue to incur if they fail to make payment. If it’s getting hard for you to get in touch, you may be able to speak to another colleague in a senior role who could shed some light on the situation and come to a mutual agreement on payment timelines.

Try to understand why your customer is unable to pay you.

Communication is key to overcoming stressful situations such as non-payment, so it’s crucial to understand the reason for the delay.

Over the past year, businesses have been hit hard by the pandemic. Many continue to see declining sales, have been impacted by lockdowns and travel restrictions, and some have even had to shut down operations. It may be a good idea to investigate if the pandemic has affected your customer. Chances are they’re experiencing a slow season, or also waiting on capital tied up in invoices. Showing a little empathy goes a long way, especially in today’s uncertain economies.

Stay top of mind with friendly reminders.

Sometimes, all it takes is a little reminder to push your client to pay an outstanding invoice. You can use accounting software or manually set up friendly reminders that follow-up with clients at certain points after an invoice is sent out.

You can set frequencies based on their payment history. If you know a customer takes their time to pay you, schedule more frequent reminders. It’s best to check in with clients to strengthen the relationship, and be open to a two-way conversation. By doing so, you’ll encourage customers to come forward if they think there will be a delay in paying you.

If nothing else works, the last resort is to get outside help.

Your primary goal should be to resolve any non-payment issues without getting third-parties involved. Because let’s face it, no one likes to be the bad guy.

If a client is unresponsive after multiple attempts of communication, then hire a professional to send a notice to a customer who hasn’t been responsive. Hopefully, you’ll be able to resolve the matter without further legal measures.

Alternatively, you may also consider hiring a collections agency to try and recover payment.

Recovering a payment doesn’t have to be a stressful experience

Late payments can have a negative effect on your business. They slow down growth, you risk not paying your employees or vendors, and they interrupt the day-to-day of your operations. So how you ask for invoice payments from non-paying customers is important.

It doesn’t have to be a stressful experience — when you are waiting on payments, consider taking steps we shared in part one of this series, followed by the tips outlined in this post.

By following through, you’ll get to the bottom of why a client is unable to pay on time, and decide if you should adjust the working relationship.

43% of companies don’t get paid on time. Here’s how to deal with non-paying customers

marzo 8, 2021/en Sin categorizar/por Rubain Manzoor

Dealing with non-paying customers can be stressful. Use these strategies to manage late payments and maintain a consistent cash flow.

If you operate in the B2B industry, receiving invoice payments on time is a major concern that can make or break your business. Even with great sales and quality products or services, many companies still experience delays when expecting payment.

43% of companies polled by Atradius reported they often have to deal with clients that don’t pay on time. Dealing with those overdue payments means significant time is consumed by customer follow-ups and chasing down unpaid invoices.

While there is occasionally some room to account for late payments, it can be detrimental to your business if invoices are consistently late. To avoid unwanted stress, you need to know how to deal with non-paying customers and have a plan in place to make sure there isn’t a lag in cash flow.

How to avoid non-paying customers

Below are four ways to take back control:

1. Research and reassess

Before you begin working with a new customer, look at their credit reports and make assessments based on customer credibility and trustworthiness. For existing clients who fail to follow your invoice terms, consider reassessing their creditworthiness and doing business with them.

You can involve us at Liquid Capital in this process. We can run credit checks for you and evaluate a customers’ risk factor. In addition, we can advise you whether a new customer is worth doing business with or not, and if they fall in the high-risk category (how likely are that customer would be to default their bill payments). An added benefit of getting us involved early is learning if you’ll be able to make use of invoice factoring to improve cash flow from your customer’s future invoices.

2. Have a contract in place

It doesn’t matter if your new customer is a family member or a business professional you’ve known for a while. You must have a contract in place before you begin working with a new client.

A contract is a legally binding document that outlines the specifics of your working relationship with a customer. What product or service are you offering your customers? When and how will the customer pay you? What will happen if the customer fails to pay you on time?

The contract is your chance to protect yourself from non-paying customers. You can discuss all costs and fees associated with late payments before-hand. Ensure you include a payment schedule that identifies the terms of payments (such as deposits, milestone payments, payments before delivery, etc.). You can also make sure you’re implementing terms that will create a consistent cash flow for you (for example, using 30, 60, or 90-day terms depending on your need for cash every month).

You can also include a “default interest” clause in the late payment policy within your contract to encourage timely payments. If the customer misses a payment, they’ll pay a higher interest rate. This term may influence your customers to prioritize when choosing who to pay at certain times. They are likely to give priority to paying partners who will charge more for late payments.

3. Ask for a deposit

After running risk assessments and background checks, if you’re still unsure about a customer’s credibility, you can ask for a deposit. This way, you can absorb some of the loss in the event of non-payment since you already charged a portion of the payment upfront.

It would help if you decided on the deposit structure based on the industry type and the product or service you’re offering to your customers. It’s also important to consider how much deposit your customer can make. If your payment is contingent on them getting paid by their customers, you should consider that and adjust the deposit term or schedule based on their cash flow. After all, you’re trying to build relationships with your customers, so it’s probably best to find a balance and discuss mutually beneficial terms.

4. Send invoices ASAP

If you think a client might disregard your payment terms and delay payment, it’s best to send an invoice as soon as you’ve completed the work. This can encourage on-time payment since the work is still top of mind, especially if they’re happy with the result. This also allows their A/P team to manage their payment process on time.

Implement these tips and speed up your invoice payment time to boost a steady stream of cash flow. If your cash flow needs are immediate and cannot be resolved with these strategies, you can use invoice factoring to inject some capital into your business.

Featured image by Adobe Stock, secondary image by Pixabay

3 factors that keep working capital flowing into your business

febrero 26, 2021/en Sin categorizar/por Rubain Manzoor

Improving cash flow and optimizing working capital is possible with these three strategies.

Working capital, aka cash flow, is vital for a successful business. After all, without sufficient working capital, businesses can end up missing opportunities, wasting money and ultimately fading away.

But many companies struggling with cash flow may wrongly assume that the only way to remedy the situation is through borrowing via traditional loans and lines of credit. Although this can be a good solution, there are many other ways to optimize working capital before going further into debt.

Factors that affect working capital

There are key factors that have a direct impact on cash flow. As a business owner, these will be top of mind every day.

Accounts receivable: Money coming into the business increases working capital, so you’ll want to speed up this process as much as possible.

Accounts payable: Conversely, delaying outbound payments will keep cash in your business for longer.

Inventory management: Businesses that sell physical goods must be careful to balance their inventory with cash flow. Having capital assets sitting in a warehouse limits cash to use elsewhere.

Three strategies that help optimize working capital

So, what can you do in each of these areas to increase working capital and cash flow?

Accounts receivable

It makes sense that the quicker you get paid, the more cash you will have on the books.

Begin by negotiating favorable payment terms with your clients, reducing the time they have to pay an invoice. As an SMB, you may find yourself lacking the leverage to achieve this when doing business with larger companies.

One option is to invoice customers upon shipping or receipt of goods, or as soon as a service has been performed, rather than waiting until month end.

You can get around this by adopting a real-time payment tool for your goods or services, which gives clients an easy way to pay as soon as you send the invoice. It can be as simple as adopting a system that uses payment links sent via email.

Also, look at the efficiency of your invoicing cycle. How many days does it take for an invoice to land with the client after it has been approved? If you can shorten this time you’ll receive payments sooner.

Related: Read the Cash Cycle Guide

If you’re in a position where you regularly have large amounts owing to you, you could look at invoice factoring. This gives you access to working capital for a small percentage of your accounts receivable based on the amount due on an invoice. Also known as ”accounts receivable financing,” you could be more easily approved for this solution than traditional business financing.

Accounts payable

On the A/P side, businesses should look at increasing Days Payable Outstanding (DPO). This financial ratio shows how long it takes your company to pay invoices from suppliers, usually measured annually or quarterly. The higher your DPO, the better your cash flow since the amount you owe stays in your hands for longer.

Here’s how you can calculate DPO with a simple formula:

Days Payable Outstanding =

(Average Accounts Payable / Cost of Goods Sold)

x Number of Days in Accounting Period

One way to increase your DPO is to negotiate better payment terms, perhaps increasing from 30 to 60 days. But as mentioned above, it can be difficult for smaller enterprises to achieve this when dealing with larger corporations. Everybody wants the most favorable terms for themselves, and more often than not, the big guys win.

You may have better luck striking a deal with vendors or suppliers you have had a long-standing relationship with and who may agree to extend your payment terms. Depending on the supplier, you may also ask for longer payment terms if you purchase larger quantities. However, this will vary from supplier to supplier.

Inventory management

We can’t stress the importance of finding the right mix of inventory if you’re selling physical goods.

Buy too much stock up-front, and your assets will be tied up until it is sold. But buy too little, and you may lose out on sales or disappoint customers with longer than expected delivery times.

It may be worth investing in inventory management software, which lets you find that balance based on lead times, stock value and other factors.

There’s always a way to improve working capital

The strategies mentioned above don’t require you to compromise how your business operates — you just need to make slight adjustments to optimize for working capital and increase cash flow. By evaluating the current way you send and receive payments, including the systems you use to manage your inventory and accounting, you’ll improve your working capital and enable your business to grow the smart way.

Is business funding missing genuine human partnerships?

febrero 9, 2021/en Sin categorizar/por Rubain Manzoor

Learn how Liquid Capital Principals provide more than just business funding for SMBs.

Looking for the right funding partner is like looking for a needle in a haystack. Although they might feel hard to find, when you find a great partner, it can be quite rewarding.

Liquid Capital Principals are the needle you have been looking for. Here is how we’re different and why you should consider working with us at the Liquid Capital team.

We understand small businesses because we’re business owners, too

Liquid Capital Principals are very much in-tune with the needs of SMBs. That’s because we, too, are business owners who understand what it takes to run our own operation. We are passionate about helping other entrepreneurs reach their dreams and ambitions.

We also recognize the pressure that comes with finding capital and funding growth. But more so, we can recognize that unsettling feeling of loan rejections from traditional lending channels such as banks.

We listen and acknowledge your needs

Liquid Capital Principals have roots in small and medium-sized businesses, so we are trained to listen and understand the specific needs and challenges of SMBs.

While conventional lenders try to categorize both small and medium-size businesses together and offer a «one size fits all» loan, our Principals take the time to talk to clients, understand your business, and offer you customized solutions that are designed specifically for your business volume and scope.

We’re not afraid to be honest with you

Businesses may feel like they have no choice but to approach their bank for a traditional loan.

When you work with Liquid Capital, our goal is not to sell you on pervasive funding. We propose solutions that will offer benefits in both the short and long-term.

Whether it’s asset-based lending, PO financing, invoice factoring, purchase financing program, equipment financing and leasing, working capital advance or top-up financing — you should know the pros and cons of each option.

Often, we have clients that come to us with a certain solution in mind, but after discussions and strategic advice from our Principals, they get a better understanding of the alternatives that end up costing them less while receiving more capital.

Related: AV company booms by adding invoice factoring

We give you more control over how you’re funded

Traditional lending has a “take it or leave it” approach because there’s only a couple of main solutions: loans or lines of credit. Borrowers don’t have a lot of say or control on the terms and conditions, and have to pass strict underwriting standards to get approval. These traditional solutions can leave you in debt and having to manage payment schedules that make you feel burdened, not relieved.

In comparison, Liquid Capital offers a wide range of alternative funding solutions, and our expert team walks you through the solutions so you have a say in how your business is financed. One key example is our invoice factoring option that allows companies to access capital without adding more debt to their books.

Not only do our Principals present alternative options that would best fit your business model and operational needs, but we also offer strategic advice based on industry trends and financial best-practices — so you always make an informed decision.

Our success is tied to how your business thrives, so you always have more control over your business finances when you work with us.

Liquid Capital provides a wide range of funding solutions for businesses of all shapes and sizes. Our Principals understand the challenges SMBs are faced with today and can help them smartly borrow money. Contact us today to get the financing your business needs from the people who understand your business.

Images by Adobe Stock and Pexels.

Business booming? Here are 4 ways to finance your business for growth

febrero 4, 2021/en Sin categorizar, Business Growth/por Rubain Manzoor

Do you have plans for expansion? Make sure you have funding lined up. But with so many options available, it can be difficult to pinpoint an option that makes sense for you. We share four ways to finance your business for growth.

When you’re planning for new hires, searching for a bigger office space, increasing your inventory or expanding your business in other ways, cash flow can be a significant concern. Fortunately, there are many financing options available for these types of situations.

We’ve talked about other ways to finance a business, but in this post we’ll cover some more alternative funding methods:

1. SBA loans

SBA loans are small business loans partially guaranteed by the U.S. government, making them less of a risk for the lender you’re working with. Similarly, The Canada Small Business Financing Program offers loans to SMBs that are backed by the government.

These loans come in a variety of amounts with APRs as low as 6.5%. They’re relatively harder to qualify for and you’ll need to meet the following requirements:

At least two years of business experience.
A credit score of 640 or higher.
At least $100,000 in annual revenue.

However, government funding may slow the application process down so you should only apply for these loans if you can wait at least three weeks to receive the funding.

2. Business lines of credit

Sometimes, it’s hard to know how much money your small business needs to cover expenses, which is why some companies opt for a business line of credit.

A business line of credit (LOC) is a revolving loan that gives SMBs access to a fixed amount of capital to meet short-term working capital requirements. Common examples of LOC uses include:

Repairing business-critical equipment
Purchasing inventory
Bridging a periodic cash flow gap

That way, you can borrow what you need without spending the entire line of credit.

3. Equipment finance and leasing

Equipment finance and leasing is a loan designed specifically for companies wanting to purchase new equipment but don’t have the capital to make the investment. The lender lets you use the earnings generated from your new equipment to make monthly payments, cover additional overhead costs and contribute to your profits.

4. Purchase financing

If you have a good credit score, you can use purchase financing to fund a one-time business purchase.

Purchase financing is a short-term funding solution that companies use when there’s an opportunity for immediate growth. They may also apply for purchase financing if they need to take advantage of a bulk-sale offered by a supplier or purchase inventory at reduced rates.

Bottom line

Small business expansion is exciting. Once you see signs that indicate it’s time to grow your business, it’s important you prepare yourself for growing pains.

One of the biggest challenges is how to facilitate growth and avoid unexpected problems that emerge when your business is expanding too fast.

Another setback is the lack of funding to back-up your expansion plans. That’s why it’s crucial to explore different ways to finance your business — such as SBAs, LOCs, purchase financing or equipment financing — and select a funding option that will take your business to the next level.

At Liquid Capital, we understand what it takes for small, medium, and emerging mid-market businesses to succeed – because we’re business people ourselves. Our company is built on a network of locally owned and operated Principal Offices, so whenever you’re talking to Liquid Capital, you’re talking directly to your funding source and a fellow business person.

Click here to learn more about our alternative funding solutions, such as invoice factoring.

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5 ways to finance a business in a slow economy

enero 28, 2021/en Sin categorizar/por Rubain Manzoor

The business funding landscape is continually evolving, in part due to economic shifts and business demands. Here are some innovative ways to finance a business or your next strategic plan.

Gone are the days when commercial banks were the only safe lending choice and even then so many rules and regulations made it hard for SMBs to obtain a loan. According to Dun & Bradstreet, bank loan success rates stood at 32% (initially 41%) for small businesses and 89% (down from 95%) for mid-size companies.

Thankfully, there are many alternative sources of funding out there besides traditional loans that SMBs can use to raise capital. Many have been around for some time, but others are relatively new and emerged over the past several years.

Keep an eye on the terms of any funding deal, as some will be more favorable than others. Here’s a quick overview to help you understand the different types of funding and lending:

Five ways to finance a business in 2021

1. Invoice factoring

Invoice factoring is one of the most common ways to finance a business. You get quick access to cash by selling your accounts receivable to a financial institution or factoring company (also known as a factor). Businesses often use a factoring company to help inject cash flow and manage slow-paying customers.

As part of the process, the factor pays a portion of the accounts receivable — typically 75% to 80% of an invoice — and keeps the remaining amount as a reserve. Once the final invoice is collected, you’ll receive the reserve funding back (minus a small fee), keeping the cash flow…well, flowing. The higher the invoice capital or the more credit-worthy the customer, the more you’ll be able to borrow.

The main upside to invoice factoring with Liquid Capital is that you receive a partner who is willing to take the time to understand your business. This is important when there are a multitude of considerations and implications, with various choices and options that you might not be aware of yet.

Related fact: While invoice factoring is in wide use in today’s business world, it’s one of the oldest funding methods, dating back to ancient Rome!

2. Peer-to-peer lending

You may have heard about this lately, and we recently explained it in another article. Peer-to-peer lending, also known as social lending, connects investors and borrowers together on a digital platform. The platform acts as a middleman and doesn’t actually give out any loans. Instead, it facilitates the lending and brings together a community of like-minded individuals that share an entrepreneurial zest.

A growing number of P2P business lending platforms offer a diversity of loans and act as a pitching service to connect businesses with investors. This type of funding is geared towards more established companies looking to grow and typically requires a thorough pitch deck to showcase. Not all businesses will be at the right stage to focus on this, nor have the time and capacity to fulfill all requirements.

3. SBA microloans

If you’re based in the U.S. you can apply for a microloan program that awards up to $50,000 loans to help grow your business. North of the border, there are also many microloan options for Canadian businesses.

These loans are made available through nonprofit community-based organizations and help you increase working capital and buy inventory, supplies or machinery. They also have relatively low-interest rates, generally between 8% and 13%.

The upside to this type of funding is that lenders may also provide some degree of consultation services, so you’re able to get direction and industry knowledge to move your business forward. However, the one catch is that some applicants may need to go through training before their loan request is even considered, to make sure they are exemplary candidates and deserving of the funding. If you’re in need of fast funding, consider the timing.

4. Fintech lenders

Many online lenders have emerged due to a rise in fintech capabilities. These lenders provide smaller loans, credit options and quick loans through their online storefront.

Many SMBs see them as a useful substitute for an immediate cash-flow problem, but doing business with these lenders has its own set of benefits and limitations. The trick is to do your research and understand what kind of lender you’re dealing with.

Look into their online reputation, and most certainly take the time to review customer feedback. When researching an online lender, you should also look into their contract terms, interest rates, along with any additional fees and charges. And always find out if an online lender will register security against your business. Some may even do this for a basic application — even if you don’t borrow money from them — which can put you in a worse position. Also consider whether expert consultation would be helpful in your circumstance – someone who will take the time to understand the bigger picture and goals for your business. Fintechs are generally transactional, which can work in some situations if you know exactly what you need.

5. Merchant cash advance

If you accept card payments, you can apply for a merchant cash advance loan (MCAs). When you borrow through this method, a lender gives your business cash upfront in exchange for a commission or a part of future credit card sales. You pay back the loan from the percentage of the business’s daily transactions.

The biggest downside to MCAs is that they can get quite expensive. In fact, based on this estimate, they can have annual percentage rates (APRs) as high as 350%. Business owners in a tight spot that go for this lending option are pursuing one of the costliest forms of financing..

While MACs can offer a quick fix for cash flow problems, they are in no way a long-term solution. How do you expect your business to thrive when someone’s eating into your profits every single day?

While there are a few options for SMBs to consider in solving cash flow needs, it’s recommended to slow down and look a little deeper at the options – and the funding providers – before deciding.

Always work with a partner who is willing to take the time to understand your business and your needs. A good partner will have your back and keep you protected.

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Moving Forward – The power of resiliency in the era of COVID-19

enero 21, 2021/en Sin categorizar/por Tom Stamborski

Here are three ways you can win big with resiliency during the COVID-19 pandemic.

“Resilience” is defined by Harvard Business Review as “The ability to recover from setbacks, adapt well to change, and keep going in the face of adversity

To say that we’re experiencing substantial economic and social changes would be an understatement. At the center of this maelstrom is a viral enemy that has affected the globe in a profound and deadly way.

It has dramatically challenged our healthcare capabilities and our ability to support the supply chain. It has crippled numerous industries, with resultant massive unemployment, while overtaxing industries that have been charged, willingly or unwillingly, with providing crucial goods and services. It has forced a social society to be distant and rightfully fearful. It has exposed our vulnerabilities on many different levels.

Having to deal with so many unknowns, both current and going forward, challenges our emotions and ability to cope. No one knows for sure what the “new normal” will look like and what will be required to adapt to it.

To be sure, America and the world are being severely tested. Resiliency will help us battle through and persevere.

Human connection: The key to overcoming the pandemic

While the above scenario is troubling, to say the least, there is a massive effort to contend with it and somehow prevail.

Heroic actions by healthcare professionals and first responders, as well as governmental efforts to shore up the economy and assist its citizens in their time of need, give rise to the fundamental mantra that provides needed solace at this time.

Together, we will get through this crisis.

To be sure, there’s no lack of commentary by the news channels, medical experts, economists, money managers, government agencies and the like that hypothesize and even predict what the U.S. and the world will look like going forward.

The overall impact will not be known fully for some time. Some businesses will fail altogether, some will have reduced capabilities, and others will change their industry focus and operations.

From the supply chain, all the way through to the end customer, every business will be affected in some way.

That impact isn’t necessarily all in the red though. While we’ve already witnessed the effect this crisis has left on many prominent industries, there are a select few — such as eCommerce, augmented reality, robotics and e-Learning — that have been positively impacted.

There’s a need to pivot strategically

Not surprisingly, the psychological and emotional impact on business owners has been profound. Being able to deal with the ongoing challenges posed by the pandemic while trying to maintain some semblance of a positive attitude can be daunting.

Making the situation feel worse is the unknown. How long will this go on?

To survive and surmount this scenario, business owners need to steel themselves with a can-do mindset combined with a keen focus on situational analysis, flexibility and innovation. Decisions need to be made about potential changes in the business model, processes, markets, customer profiles and requisite resources.

For business owners and leaders, some changes will require minor adjustments while others may require significant realignment of teams and priorities. The key is for the business owner to act decisively.

Recent research by IBM reasserts that COVID-19 has forever changed how companies around the world operate. Executives are shifting their top priorities as they plan for the future, with 55% reporting the pandemic has permanently changed their organizational strategy. Another 60% indicate they’ve adjusted their approach to change management and even accelerated process automation.

One way or another, 2021 will be different from last year

Throughout this most difficult period, and likely continuing for some time, business owners will need to continue to reaffirm their resolve to move forward.

This can be challenging, given the range of issues affecting their businesses. In the face of adversity, resiliency is the common thread with those who will find success. Being able to visualize opportunities where none appear to exist, will also improve the likelihood of success.

And as the old saying goes: When life gives you lemons, make lemonade.

This speaks to the spirit of an entrepreneur imbued with the will to win. History is replete with many examples of individuals and businesses facing dire circumstances—only to come out stronger and even more determined to succeed.

As we get to the other side of this crisis, the process will ultimately make many business owners more durable and wiser. Experience, although sometimes painful, provides a frame of reference for the future. Hopefully, we won’t have to endure a similar situation going forward, but the experience should better prepare business owners to address their challenges and seize opportunities in a more informed way.

When working with us at Liquid Capital, clients not only receive funding but also gain access to a strategic business partner who works alongside them to make sure their business is thriving. Our Liquid Capital Principals work closely with our clients and referral partners to help them address concerns regarding business operations outside of funding.