(BPT) - Cash flow is the lifeblood of a business. Positive cash flow means your business is in a position to grow, while negative cash flow may mean you have some tough decisions to make, like whether to pay your employees, vendors or yourself.
Small business owners and the self-employed should always be aware of their cash flow status. Having enough money on hand can dictate your next decision, ultimately having a big impact on the future of your company and its survival. Navigating cash flow struggles can cause even the calmest person to worry.
The importance of working capital
Every business requires and expects its funds to carry out its day-to-day operations. This includes things like the purchase of raw materials and payment of wages. These funds are called working capital.
Working capital and a healthy cash flow are some of the most crucial aspects for any small business to thrive and be successful. Unfortunately, 61% of small businesses around the world struggle with cash flow, according to "The State of Small Business Cash Flow" report by Intuit QuickBooks. More than two in five U.S. small business owners have experienced cash flow issues in the last year, and more than 52% have lost $10,000 or more by forgoing a project or sales specifically due to issues created by insufficient cash flow.
A smart funding option
Despite the obvious need, it can be difficult for small businesses to access working capital. According to the 2019 Small Business Credit Survey, 64% of employer firms faced financial challenges in the prior 12 months and more than two-thirds of owners addressed these challenges by dipping into their own personal funds. When looking at the 43% of firms that applied for external sources of funding, less than half of the pool of applicants received all the funding they needed.
If you're an entrepreneur, one option you should consider is QuickBooks Capital, an innovative lending product that provides small businesses which have traditionally struggled to demonstrate their credit worthiness to access the funding they need to grow. How does QuickBooks determine credit worthiness? Through breakthrough data science and machine learning, QuickBooks assesses a business holistically and gives small businesses credit based on a complete view of their books, including ongoing projects, outstanding receivables and more. In fact, 99% of QuickBooks Capital customers said it was “easy to apply” because QuickBooks Capital already had the relevant information needed for the application.
With competitive rates, a simple application and no extra fees, QuickBooks Capital is a great option for the 4.2 million small businesses that are already QuickBooks subscribers. Plus, businesses can see funding options without a commitment, and there are no extra steps to determine how large of a loan you are eligible for — it's all right there when you log in to your QuickBooks account
In the last 18 months, QuickBooks Capital has funded $360 million in loans to small businesses. Eligible small businesses can now get working capital loans of up to $100,000 for a 12-month term and most loans fund in two business days after approval. Overall, 90% of QuickBooks Capital borrowers have said the funds they received helped them grow their business by allowing them to expand their marketing efforts, meet operating expenses and much more.
If you've conducted an analysis of your business cash flow, and see that access to some working capital would be helpful — empowering you to take on a new project or hire a new employee — consider QuickBooks Capital as a source of funding. For more information on QuickBooks Capital, see online here, and also check out the brand’s helpful guide on ways to increase cash flow.