There is typically a one to four month period before new staff are assimilated to a company’s workflow and culture. Positive returns on your recruitment drive may only be recognised several months after the costs of hiring new staff are incurred.
But with the majority of SMEs concerned about working capital and cash reserves (REF LINK), how do SMEs ensure they are able to invest in new and existing people and remove this barrier to growth? 47% of respondents to Capify’s Q1 2002 Confidence Survey identify these working capital/ cash flow struggles as the primary driver for seeking external finance.
There are several external options that can help you build your cash reserve without having to take funds away from other areas.
A line of credit or secured small business loan could help you build your cash reserve, for example. However, with many finance providers tightening their lines of credit (INSERT REF LINK) and 52% of SMEs stating that they would not be confident of securing that finance from their traditional banking partners, SMEs might be encouraged to explore alternative or specialist financing options.
Alternative financing methods, such as an unsecured business loan, could be much more suited to funding your recruitment plans. They don’t require you to already have large sums of money in the bank and are much more accessible to UK small businesses.
Short term business loans can be perfect to bridge to bolster any short-term cash flow issues. You can agree a loan term of up to 12 months and, by paying back either daily or weekly, manage the repayment in line with your cash flow. This avoids the business being burdened with a large debt that has to be paid back in sizeable monthly sums. Unlike an overdraft facility, the fees and repayments are fixed and cannot be withdrawn unless you default.
Alternatively, a business cash flow loan could help your business start to build its cash reserve within around 24 hours of application. This short-term cash injection can help fund the initial investment in recruitment until the new hires are positively contributing to your profitability.
At Capify we offer a range of business loans to help support your business through high and low periods. Check to see if you’re eligible for one of our loans with our online eligibility checker. Or, if you’d prefer to talk to a member of our team, we’d be happy to guide you through the process. Give us a call today on 0800 151 0980.
Short term business loans (with a repayment period of up to 12 mth) can be perfect to bridge / bolster any short term cash flow issues, as you can agree a repayment period and by paying regularly (either daily or weekly) manage the repayment in line with your cash flow and not burden the business with a large debt that has to be paid back in large monthly sums. Unlike an overdraft the fees and repayments are fixed and the facility cannot be withdrawn (unless you default)