Sometimes, getting financing to start an auto repair shop is difficult. It’s never fun to look for business financing, and you can get roped into paying more in interest than you need to. But it doesn’t have to be that way.
Even established businesses run into cash flow issues every now and then, and that’s ok. It doesn’t mean you failed; it just means you need a little help to get through the tough times. There are a lot of options out there; you just have to be smart about what you choose and do what’s right for you.
If you know what types of loans are available and you know what to stay away from, you’ll be in a better position to get up and running quickly. Here are some ways you can finance your auto repair shop.
You can avoid cash flow problems by building up a cash reserve. It takes time, but throughout the course of running your business, you can save a little here and there to have some cash on hand for emergency situations, slow seasons, or special purchases.
This isn’t the fastest solution, but it’s definitely the best option because getting your business into debt isn’t something you want to make a habit of. Having sixty days of company expenses in the bank is usually enough for most business owners.
Give Early Payment Discounts
Before turning to financing, starting offering your customers an early payment discount to get money in the door. You can usually entice people to pay within the first ten days of their invoice if you offer them 2-5% off.
You don’t want to eat into your expenses too much because that defeats the purpose, but offering a discount based on how early they pay gets you the money you need faster. Terms are always negotiable, and you can experiment to see what works.
This is a good incentive for your customers who already pay regularly, but may pay late. It’s not a good idea to offer this to new clients who don’t have a payment history or clients whom you have trouble collecting funds from.
Lines of Credit
Usually, if you’ve been in business for a few years and can prove you have steady revenue, you can qualify for a line of credit to help alleviate cash flow issues. These lines of credit vary among financial institutions, but they’re usually easier to get than conventional loans.
A business line of credit is revolving, so they help your business build credit, and they can be helpful in times of hardship. You may find you don’t need to use it all year long. You just need it when business is slow, and if you apply for it while business is good, it’s there for you when you need it.
Quick Loans Direct offers many different types of funding including same day business loans or a same day business cash advance. Find out more today!