Your Business

Are You Suffering from Financial “Groundhog Day”?

By Rieva Lesonsky

In the movie Groundhog Day, Bill Murray plays grumpy weatherman Phil Connors, who is sent to cover the annual Groundhog Day festivities in Punxsutawney, Pennsylvania. The next morning, Phil wakes up only to find that he is reliving the same day—Groundhog Day—over and over. Many small business owners are stuck in the same type of situation, reliving the same cash flow problems over and over. Invoice financing can help you get out of this rut.

For Phil, the only way to escape the nightmare is to change his behavior. Fortunately, small business owners suffering cash flow struggles have more options. They can try to get a business loan or line of credit from a bank, ask friends and family members for a loan, or turn to alternative financing solutions such as merchant cash advances or credit card financing.

However, all these options have serious drawbacks for a small business owner who needs money in a hurry. Obtaining a business loan or line of credit can take weeks or even months. Even if friends and family members have the money to lend, asking them can be embarrassing and awkward. Alternative financing solutions can provide quick cash, but some also charge high interest rates and onerous fees.

Invoice financing offers a solution

Invoice financing lets you take advantage of your unpaid invoices to get back in the black. The financing company advances you the amount of your unpaid invoices. While this may sound like invoice factoring, there are some key differences. Invoice financing gives you the full value of your outstanding invoices, while factoring only advances you a percentage of the amount. (Find out more about why invoice financing is better than invoice factoring.)

When you need money, time is of the essence. With Fundbox’s invoice financing solution, it’s fast and easy to apply. Just create a free online account and click to connect it to your accounting software. Once approved, you can begin financing invoices right away. The money can be in your account as soon as the next business day, depending on your bank. Plus, you can finance as many or as few invoices as you want to.

Escaping Groundhog Day: Is it time to change?

In the movie, Phil can only escape Punxsutawney by changing his behavior and becoming a better person. Small business owners with recurrent cash flow problems need to make some changes, too, if they hope to end this cycle. Here are some steps that can help you get out of your personal Groundhog Day rut.

  1. Monitor your business cash flow regularly

    Keep tabs on your company’s cash flow on a weekly basis so you can see when you’re falling short. This will help you better prepare for problems by taking steps to handle them, such as financing some of your invoices to get over the hump.

  2. See the big picture

    When looking at your cash flow, don’t just look ahead: Look back At the end of each quarter and at the end of the year, review your cash flow statements for the prior year. You’ll be able to spot seasonal trends, which can help you better prepare for next year. For instance, if every fall you have to hire temporary employees or purchase a lot of inventory, you might find that cash outlay always has a negative effect on your cash flow. How can you prevent this problem in the coming year? Perhaps you can stagger your inventory purchases or hire independent contractors so you can pay them in net 30 or net 60 days instead of right away.

  3. Know your options

    You never know when your business will face a cash flow problem.Sometimes, unforeseen opportunities or challenges require spending more than you expected. Protect your business by having several options available to you at all times, and make sure invoice financing is one of them.

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