These issues can depend on several factors including not enough sales, overpurchasing, increase of past due receivables, inventory turnover problems, passive interests, among others.
Representing a measure of both a company’s efficiency and short-term financial health, reflecting the results of several activities, including inventory management, debt management, revenue collection, and payments to suppliers, entrepreneurs are called to monitor working capital and, in case of shortage of cash for the day-to-day expenses, try to get access to dedicated loans to continue daily operations.
This can often be challenging anyway with banks requiring collateral or other (personal) guarantees the money will be repaid.
To overcome this hurdle, common working capital loans act as unsecured debt, which don’t require entrepreneurs to provide traditional collateral and represents the right solution for the smallest companies, the ones just starting out or the established ones in a period of low cash flow.
To facilitate lending, Atlanta, GA-based Kabbage has built a financial services data and technology platform that automates funding access to small businesses quickly. By leveraging data generated through business activity such as accounting data, online sales, shipping and dozens of other sources to understand performance and deliver funding in real time, Kabbage avoids the comprehensive documentation and application processing time of traditional loan providers offering ongoing access to working capital that can help entrepreneurs cover routine businesses expenses.
Kabbage currently serves over 80,000 small businesses, from retailers to construction businesses to professional service firms, which have chosen its up to $100k line of credit.