Three Reasons to Finance a Small Business
To Handle Downtime
Seasonal businesses, in particular, experience downtime from time to time. For instance, you may make a large chunk of your sales in the holiday season. There is nothing wrong with that, but you should have enough capital to get by in other months.
Are you planning on expanding your business? With positive working capital, you are in a financial position to act quickly. The same cannot be said if the NWC is negative.
To Be Ready for an Emergency
You have to prepare your business for emergencies because you can never really tell what lies in store. What if your main client walks out? What if you are hit with legal action? Things such as these can impact your financial state. When your business has working capital, you do not have to scramble to get the necessary funds to handle anything that arises out of the blue.