Manage Inflation with a Merchant Cash Advance

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Manage Inflation with a Merchant Cash Advance
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What is inflation?
When the price of goods and services rises over a
period of time, reducing the purchasing power of
the currency, that is inflation. A rise in
inflation rates north of 5 percent can be
crushing to everyday consumers and a death blow
to some small businesses. The rate of inflation
is the increase in prices during a specified
period. If inflation is at an annualized rate of
3, a product, good or service that costs 1,000
now would, in theory, cost 1,030 the following
year. Inflation reduces the value of every dollar
in your pocket or your bank account.
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What causes inflation?
Understanding the causes of inflation might not
be enough to save a business thats suffering
because of it, but it can help you stay prepared.
Inflation can occur for many reasons, including

• Demand outstrips supply When the demand for a
  product or service is greater than the actual
  supply of that entity, inflation can ensue. Its
  also the result of what happens if supply is
  restricted but demand is not. This is exemplified
  by the rise in gas and energy prices when oil
  refineries are shut down or drilling ceases.

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• Supply chain disruptions According to
  morningconsult.com, supply chain disruptions have
  been a contributing factor to recent rising
  inflation.
• Excess money An increase in money supply causes
  a devaluation of the dollar, and the result is
  that a dollar wont go nearly as far in its
  purchasing power as it would otherwise.

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How can a small business deal with inflation?
There is no easy answer or simple solution for a
small businesss ability to counter the effects
of inflation. That said, a few principles could
be helpful to the entrepreneur struggling against
the tide of rising costs and address business
needs.

• Study your business profit margins How much
  have your own profit margins dwindled during an
  inflationary period? Once youve come up with a
  figure, study ways that you might be able to
  boost those margins once again.

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• Cut expenses Are there services your business
  pays for regularly that it does not use
  regularly? Is it a fundamentally necessary cost
  or something that can be reduced or eliminated
  entirely?
• Reduce overhead Is your business housed in a
  facility thats larger than the amount of space
  you really need? Moving to a smaller facility or
  to a less expensive location would reduce your
  overhead costs.

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What short-term funding options can help with
inflation?
There are many types of financing options
available to small businesses dealing with
inflation, from traditional bank loans to
alternative loan options. Types of loans that
small businesses might be able to secure quickly
include

• Study your business profit margins How much
  have your own profit margins dwindled during an
  inflationary period? Once youve come up with a
  figure, study ways that you might be able to
  boost those margins once again.

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Business Line of Credit
Sometimes, a business line of credit can be
approved in as little as 24 hours or less.
Depending on the lender, you might only need a
credit score of 500 to qualify for a business
line of credit. When a lender provides
pre-approved funding with a maximum credit limit,
that is known as a business line of credit. If
the borrower is approved for this line of credit,
funds can be accessed whenever they are needed
until the established credit limit has been
reached.
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Short-Term Loan
Often referred to as working capital loans, a
short term loan is one in which the borrower
receives an upfront lump sum payment and then
repays the loan according to the repayment terms.
Some short-term loans allow the borrower to make
extra payments to pay it off sooner. However,
some actually come with penalties for early
repayment. Short-term loans generally have a term
of 12 months or less.
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Invoice Factoring
For companies that have unpaid invoices. Invoice
factoring is a merchant funding method where you
sell your accounts receivable at a discount for a
lump sum cash amount. at a discount for a lump
sum cash amount. A method of securing working
capital that is a little different than applying
for a loan, invoice factoring is the process of
selling invoices at a discounted rate to a
factoring company and receiving a lump sum of
cash that can be used as working capital.
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Why Choose Biz2Credit?

• Trusted partner for franchise funding
• Biz2Credit was founded in 2007 and has provided
  more than 10 billion in loans.
• Dedicated support team
• Tailored financing solutions

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