Flexible Finance: Prospa’s Line of Credit helps small business cashflow
The last two and half years have been extraordinarily tough for the business sector, and none more so than small businesses.
With lockdowns, supply chain woes, the increasing cost of freight, wage increases and now rising inflation, it can feel like the hits just keep coming. These challenges have impacted us all at once, particularly the cash flow of many small businesses.
A financial product like Prospa’s Line of Credit, developed with these types of pain points in mind, can give business owners peace of mind when things start to pile up. Prospa’s Line of Credit provides businesses with access to between $2,000 and $150,000 that can be dipped into when the need arises and you only pay interest on the funds you actually use.
This product can be used when your business needs some wiggle room for unexpected cash flow gaps – for example to pay wages or order inventory if yours is a goods-based business. Or you may have expenses due but outstanding invoices mean the money isn’t in the bank to pay it on time. Rather than risk a late penalty, a Line of Credit can take the pressure off.
But it’s also a great tool to help you grow your business and achieve goals. Things like training staff or a new marketing campaign can also be financed this way.
It’s not like a traditional business loan. The money is available to draw on when the need arises, and businesses don’t need to pay interest on money they aren’t using.
Prospa ran a survey to find out what kinds of things were priorities for businesses, and what were the barriers to achieving them. Maintaining profits, high overheads and managing debt were key challenges. Further, cash flow management was found to be a real need for one in three businesses.
Deborah Delport, who runs a small engineering firm, was able to ride the waves of COVID uncertainty by applying for a Prospa line of credit.
In the middle of juggling multiple projects, her business needed extra cashflow to cover costs. Headcount was down due to holidays and winter illness and that meant projects couldn’t be finished and therefore payments were also delayed.
“During COVID, I anticipated a cash dip, recently it has been taking longer to receive payments, so when Prospa reached out about their Line of Credit it was like they read my mind.
“It has been a great buffer for my business, and it’s nice to know that funds are available in the background to fall back on if needed, while not having to pay interest on funds I don’t use,” said Deborah.