Small Business Working Capital: The Funding Revolution is Here

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Small businesses need working capital to operate and to grow. It’s no secret. But for many small business owners, the waters are murky when it comes to accessing capital.

Banking products and options for small business funding are unfamiliar to many business owners.  Entrepreneurs’ expertise is often in the products and services they offer, not in the financials. Applying for loans and financing is cumbersome and time-consuming. Banks are yet to develop an efficient way to understand unique small business models, which means applications are long and arduous, and often don’t capture the business opportunity for the candidate. When the banks don’t fully understand the business model, they can’t be the partners that business owners need.

None of this is new. What is new is the technology available for small business owners. Soon, there will be far simpler options for banking and financial management that will rewrite the rules for access to working capital. It’s not an overstatement to say that we are on the brink of a financial revolution for small business. By consolidating data into a tailored financial system, business owners will be informed, prepared, and most importantly, they’ll finally have a way to access working capital on their terms.

In this post, you’ll see what it looks like in practice, and then you’ll see solutions to many of the problems small business owners face when it comes to access to capital.

Consolidating Small Business Financial Data

Small business owners often have financial data scattered throughout numerous sources, which makes it challenging and time-consuming to capture overall financial health in real-time. What if there was a way to access a connected system that pulled financial data from everywhere within your business? Accounting, payroll, expenses, invoicing, and other apps will all feed into one dashboard where you can see a complete view of financial health.

Simply by connecting all of the financial tools you already use, you’ll have a real-time financial snapshot of your business at all times. Maybe you see where this is going.

Those cumbersome, manual applications for lending and financing are no longer necessary. Your business health, opportunities for growth, and cash flow are already captured in the technology. This is the foundation for your access to capital—a complete view of the business, updated in real-time, replacing the weeks-or-months-long banking approval process that never accurately portrayed your business plan.

Create Opportunities by Improving Business Financial Health

Why stop there? You’ve got the data in one place, so put it to work.

Financial management technology can use that data to forecast cash flow, recommend budgeting needs, and identify trends/opportunities to grow.

The consumer banker already has access to this type of experience with technology that tracks spending habits, income goals, budgets, and personal trends without combing through statements. Corporate leaders have finance teams and big banks bending over backward to optimize their financial health. To this point, there’s been no easy way for small businesses to achieve this.

The consolidation of data allows for predictive insights rather than reactionary firefighting from small business owners. Now, you can predict upcoming needs for cash, anticipate cycles of revenue growth, and make better financial decisions. You can also leverage this unique data to build your business credit score or hit the benchmarks that will serve as your evidence to raise capital for the next opportunity.

Access the Right Capital at the Right Time

Now, let’s revisit some of those unfortunate truths about small business working capital and the ability to access it:

It’s time-consuming, impersonal, and there’s no guarantee that you’ll get what you need at the end of the process.

Rather than banging your head against the wall in the traditional lending/funding circuit, that financial management platform can proactively connect you to the right capital for your business needs. After all, it understands your finances at all times based on all that data. When there’s an opportunity for growth, it understands the right type of funding or financing to meet your needs. You won’t need to guess. You won’t need to apply for a certain type of financing only to have a bank offer something else.

Think about all of the things removed from this experience. It removes the need to educate investors/lenders about your business model. It removes the potential for blind spots and biases that small business owners often face in accessing fair capital.

Most importantly, it is removing the burden from the business owner, replacing a manual application process with a menu for the business owner to choose from. Cliche as it sounds, access to capital is one click away.

What would your small business do with fair access to capital?

Better funding starts with understanding your cash.

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