Running a small business is hard, especially now during lock down. One of the biggest challenges that faces small and medium-sized businesses is cash flow how does one keep the lights on when cash flow is tight? For business owners, managing business operations is hard enough, but throw in managing the finances and it can sometimes feel impossible.

In this post we will introduce how an alternative credit lending facility can help SMEs take advantage of growth opportunities, to not only keep their business operating but also generate a positive ROI in the long term.

Cash flow management 

How does one manage business cash flow effectively?

More Sales? – the easiest and best would be to increase sales while managing costs – if only it was that easy! With the constant drive to increase sales while juggling cost inputs (all with different timelines) one really needs to know how to juggle one’s cash reserves

Credit Facility? – having access to a credit facility, be it a bank overdraft or an alternative lender credit facility, can be a lifesaver,

Bank overdraft vs a Credit Facility

What’s the difference between a traditional Bank Overdraft Facility and an alternative lender Credit Facility?

When does alternative funding make sense?

Credit lending facilities can serve a specific purpose and may not work well for every business. How do you know if this is a good choice for you?

You need a quick turnaround

  • Some deals appear and you need to act quickly. This does not allow for the long lead times of traditional lenders. You can access capital from Lulalend within 24 hours. 

You are not being approved by a bank 

  • Traditional lenders have traditional credit models, which do not suit all businesses. Lenders like Lulalend can assess a business’s ability to repay a loan in minutes using their machine learning algorithms and alternative sources of scoring data. 

The costs are not clear

  • When assessing a business opportunity, you need to have a clear idea of what the costs are to ensure you are making money. Loan initiation fees, early settlement penalties and ongoing account costs are often “hidden” costs that can make traditional lending not as cost-effective as they appear. 
  • Lulalend’s fees are completely transparent – there are no initiation fees, no early settlement penalties and no account fees – you only pay when you access your facility

Margins can support the costs (Positive ROI)

  • When making any business decision that requires using a credit facility, you should check that your income and margins can support the cost of that funding. Here are a few simple examples: 

The advantage of using a lender like Lulalend, is that you can calculate your investment costs with 100% certainty before you commit to a deal so you can ensure your ROI is positive. In addition, as soon as your deal is done, you can park the Lulalend facility – at no cost! – until the next deal presents itself. 

 

Apply in minutes online and get business funding in your account in 24 hours.

 

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