Right now, we are all living in unprecedented times and facing a lot of adversity and uncertainty. But as an asset-based lender, one thing we know for certain is that opportunities for growth are always possible. We have seen, firsthand, how our clients have pivoted their businesses and connected with markets in new and profitable ways. The pandemic is still very much a reality, but there is always an opportunity for growth, which means there is always a need for lending.
Businesses are getting impacted in different ways, but we always see a certain formula that translates to long-term, profitable growth and greater asset-based lending opportunities. Here is how to obtain the lending you need in order to grow your business the right way.
Don’t chase growth for growth’s sake
This is our number one piece of advice: Position your business’s growth so that you can achieve a bigger and better bottom line and stronger company. Those companies that are looking to grow their top line and increase sales for added revenue, without building reserves, are going to find it much harder to survive at any time, let alone during a crisis. Your revenue must translate into profits that you retain for the purpose of making your business more resilient. If you are looking to build a stronger, more profitable company, why wouldn’t your lender support you?
Don’t be afraid to over-communicate with your lender
We have found that there is no such thing as over-communication when it comes to the relationship between you and your lender. We might be biased, but we love hearing from our clients regularly. In these uncertain times, communicating with your lender and keeping them informed as to how your business is doing inspires a huge level of confidence, which in turn leads to fair and reasonable support.
In all cases, make a plan
These are tough times, and you will be navigating uncharted territory, so make a plan and be flexible. Make updates and reassess regularly. On the occasions when it would be appropriate, share this plan with your lender. Be open and honest. Make sure your plan incorporates a plan for cash flow:
– How much cash do you have?
– How much cash can you bring in?
– How much of that cash do you need week-by-week?
Having a flexible plan will allow you to adapt regularly.
Don’t be afraid to ask for help
Lenders, especially the team here at eCapital, want to help in any way we can. We want to see your business grow just as much as you do – so don’t be scared to ask for help. Be prepared, however, to do some of the heavy lifting. This is your business, first and foremost, and while your lender will be heavily invested in your growth, you stand to gain the most, so be ready to backstop some of these needs yourself and share them with your lenders and suppliers. This is the perfect time to build further on your relationships and trust.
To sum it up
eCapital wants our clients to be as strong as possible and achieve sustainable growth that will last a long while. To achieve this growth, be sure your revenue is growing into profits that you retain, communicate how your business is doing regularly with your lender, build a cash flow plan, and don’t be afraid to ask your lender for help.
Since 2006, eCapital has been a trusted financial partner for thousands of small to mid-size companies in all stages of development. Our customer base continues to grow as our reputation for reliable funding, dedicated service and effective risk management endures. As a leading industry innovator, eCapital integrates emerging technologies with a forward-thinking approach to solve business problems. Working in collaboration with our clients, eCapital shapes customized factoring facilities to meet the working capital needs and cash flow requirements specific to your business.
For more information about how our experienced team supports businesses’ capital requirements through all stages of development, visit eCapital.com