by Jason Fleming, Senior Financing Consultant at Dealstruck
Summer is quickly coming upon us, and that means many businesses like yours are developing strategies to adapt to the changing season. Retailers involved in frozen yogurt, cold beverage and shakes, swimsuit attire, BBQ accessories, travel and hospitality (including camping), or sports such as surfing will see a spike in demand as the heat wave hits. Even tanning salons are eager for warmer weather. Home and commercial business owners will also seek out Heating, Ventilation, and Air Conditioning (HVAC) professionals to help them battle the heat wave.
Inventory management becomes a crucial question. But, it doesn’t just stop there. How have you prepared for hiring and retaining part-time workers? Or, how will you balance marketing expenses while ensuring your employees are paid in a timely manner? Is your small business financially prepared to adapt to the traffic increase?
If successfully managing inventory turnover is the game changer, then your competitive advantage not only lies in supplying sufficient product or service to deliver value to your consumers, but also lies in your capacity to finance inventory with flexibility. Your vendor may require you to prepay or pay cash on delivery for inventory, resulting in an extended lead time as the inventory is manufactured and shipped to you (overseas shipping may take even longer).
Dealstruck’s Inventory-based Line of Credit is ideal for businesses that have recurring inventory purchases that require a significant cash outlay from the business. Rather than having to tie up your own cash in inventory, Dealstruck will finance your inventory so you can use your cash for other uses that will drive greater sales. Each time you draw on the credit line, the draw is paid back over 26 weekly payments. The first four payments are interest only, allowing you to make small payments in the time it takes to receive and stock the inventory.
In the wider picture of financial sustainability, how much will this really cost you? Assuming you do not pay down the credit line early, a $25,000 draw will incur about $1,500 worth of interest and fees by the time it is paid off. Unlike interest payments from using personal credit cards to purchase inventory, interest payments from the line of credit can be written off company taxes. Dealstruck’s product is a cost effective way for a small business to finance its inventory through an alternative lender. Draws taken out to full 26 week term typically cost around 7 cents on the dollar. Also, borrowers can offset the cost of the line by taking advantage of the purchasing power offered by the credit line to buy larger quantities of inventory, typically at lower unit prices.
Want to hear some good news for small businesses expecting higher volume this summer? Dealstruck just released its interactive Line of Credit Borrower Portal. This portal provides a seamless experience that lets you focus on what really matters: your customers. In addition to making general updates to your account, the portal is a one-stop-shop that lets you:
- View your current balance and amount available for draw
- Update invoices directly from your accounting systems
- Immediately apply payments received from customers to pay down outstanding balances
- Review the trade credit of each customer
Dealstruck is empowering small businesses like yours with unique, appropriate, and affordable capital. We put ourselves in your shoes as you navigate through each season – fall, winter, spring, and now – summer. So, get your business ready for a new season. It’s going to get hot.