With economic uncertainty in the background, many SMEs are struggling to survive. While a business loan might seem like a burden, short term flexible loans can actually transform businesses and give them a much needed boost. These are some unexpected ways it can help businesses:
1. Can pay suppliers on time
Many SMEs operate on a payment term basis, meaning that they allow customers to pay for goods after a certain number of days, for example, a payment term of 30 days. However, these businesses also need to pay suppliers, and if their customers delay payment or the payment cycles do not match up, it leads to a cash flow crunch. With a business loan, businesses can avail funds at an affordable price. For example, Finaxar Credit Line avails up to S$200,000 for SMEs, interest starting from 0.7% per month. This will allow businesses to pay suppliers on time and not worry less. Finaxar offers short term facilities that can sufficiently close any short term cash flow gaps, giving business owners peace of mind. Unlike term loans that need to be regularly repaid regardless of usage, Finaxar's loans are flexible and allow businesses to pay only when they use the facility.
2. Can improve trust between suppliers and buyers
Suppliers are often chasing payments from buyers and this can damage their relationship and erode trust. A business loan can change this dynamic. For example, with a notified Receivables financing account, businesses will be assured that their customers will pay on time due to the timely collection by a professional third party, such as Finaxar. Businesses can drawdown the amount they need from Finaxar and worry less about chasing payments. Instead, they can focus on growing their business, and trust Finaxar to bridge the gap between receivables collection and business expenditure.
3. Can be useful to smooth out demand fluctuations
A large proportion of small businesses are seasonal, such as speciality cuisine or speciality goods that see a spike in an increase during Chinese New Year or Christmas. However, there are businesses that face an unexpected spike in demand too, such as supermarkets or mask manufacturers during the unexpected virus outbreak. Of course, when there is an opportunity, businesses should grab it. However, many businesses do not have enough funds on hand to suddenly increase production. With Finaxar Purchase Financing, you can now optimise your cash flow and working capital just by submitting your purchase invoices and avail funds easily to increase production and make a handsome profit when the opportunity arrives. Finaxar is able to increase credit limits on a case by case basis, in order to help businesses make use of business opportunities. Finaxar business loans are flexible, allowing your business to be flexible too.
In conclusion, taking up a business loan can tremendously improve your business, by helping you pay suppliers on time, improve supplier-buyer relationships and smooth out demand fluctuations. Finaxar specialises in short term working capital solutions, do speak to our sales team to find out more.