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Common Cash Flow Challenges That Can Affect Your Business

Scale notwithstanding, every business experiences fluctuations in cash flow and revenue. These come naturally as the business continues to run.

What causes fluctuations in revenue?

Revenue traditionally goes up when business is good. That upward trend in revenue is essentially what’s desired. But there are times when that does not happen and the business starts to experience a decline in the revenue it generates. There are a number of factors that can cause falling revenue:

  1. Market volatility. Changes in the economic conditions tend to force consumers to spend less on various discretionary consumption’s. Such trends may happen from time to time and cause seasonal shifts in revenue flow.
  2. Shortcomings in your sales channel. Your business may experience manufacturing or delivery issues and such will inevitably result in reduced availability of the product. The less the product in circulation the less revenue you’ll expect.
  • Shifts in consumer behavior due to trends and seasonality. Some products are needed more during particular seasons. Heavier cloths will be selling more in late fall and during winter but less of them will go in midsummer for instance. You can expect less revenue in summer if you are dealing in such outfits.

This list may go on end, but the bottom line is that the consequences of reduced revenue are likely to hurt the business. The company may accumulate debts and plunge into a bad credit rating.

At such times when revenue is utterly low yet overheads keep piling up, the company will often need help.

Way out

While getting a business loan from traditional banks remains frustrating to merchants due to the many bottlenecks that banks have put in place, merchant cash advances are available from companies like the First American Merchant.

These cash advance services are well-suited to help merchants bridge the gap between fluctuations in their revenue. They have fair repayment terms that are tailored to match the incoming revenue patterns.

So, even though there are other alternative options for merchants to explore during low revenue seasons, cash advances from alternative lenders remain a leading option for all merchants.