Alternative Financing Solutions to SMB Cash Flow Concerns: A Discussion with BlueVine's CEO

Alternative Financing Solutions for Small Business: A Discussion with BlueVine's CEO

Sometimes, no matter how hard you work or how dedicated you are to your business, there are obstacles that seem like they are going to be impossible to overcome. One of those obstacles often rears its head in the form of financing.

You’ve got great customers who you know will pay, but not right at this moment. When you’re first starting a business or attempting to scale, not having that cash on hand can be extremely problematic. You turn to more traditional forms of financing to supplement your cash flow and struggle to get approved or get the capital when you need it.

I recently spoke with Eyal Lifshitz, Founder of BlueVine, about this dilemma small business owners face and he had some interesting insights into the matter.

A Need for Alternative Financing Options

According to the Small Business American Dream Gap Report, 45% of small business owners who are denied financing get turned down more than once and 23% don’t know why their applications were denied.

When your customers don’t pay for 30, 60, or even 90 days out, it becomes too difficult to deal with the short-term game, let alone think about what your long-term plan needs to look like. As it becomes more difficult to procure lending from banks, small business owners have started looking for alternative financing options to help them cover business expenses.

“[Credit cards are] the obvious one that most people use, but it’s not necessarily the right one.”

There are a number of ways businesses can go about procuring capital. For business owners in need of short-term working capital to pay for everyday needs like payroll, marketing, inventory, and so on, these are some of the alternative options Lifshitz mentioned:

  • SBA loans
  • Term loans
  • Larger equipment financing
  • Lines of credit
  • Merchant cash advances
  • Invoice factoring

When you think about it, these are the expenses that matter most in the early life of a business. That’s why short-term financing options, and companies like BlueVine, are a great option for many small business owners.

“I urge small business entrepreneurs to really think about what they’re looking for and then they can examine that instead of the pros and cons of each type of product.”

You can listen to more from my full interview with Eyal Lifshitz down below:

Alternative Financing Options Reversing Small Business Cash Flow Concerns

Alternative financing options don’t just provide business owners with easier access to capital. BlueVine is a great example of this.

Time

“For small business owners, the most precious commodity for them is their time.”

And that’s really the biggest draw for many of these options: the speed with which entrepreneurs can access the capital needed to keep their business running. Traditional banking lenders have to pull credit histories, and then assess and review them before making a decision. That’s not typically the case with online-based, technology-powered companies like BlueVine.

Convenience

There’s also the convenience factor to consider. Many of these alternative financing options, like BlueVine’s invoice factoring and lines of credit, are considered “revolving” credit products. This means that once you’re approved, they’re yours to use up to the limits pre-set for you (like credit cards). Traditional financing options tend to require set terms of use and force business owners to reapply, which takes time, time that business owners don’t have.

Objectivity

Lastly, there’s the objectivity factor.

“Decisions are made very objectively. Colorblind. Age blind."

So long as BlueVine’s machines run a risk assessment on a small business applicant and everything checks out, there’s very little standing in the way of them receiving the short-term financing they need.

It is BlueVine’s mission to help businesses succeed, and they do this by providing easy, fast, and convenient access to capital. Specifically, BlueVine offers lines of credit as well as invoice factoring. Lifshitz told me that he envisions expanding into additional products in the future, making BlueVine an all-encompassing product that helps business owners deal with everyday financing needs.

As operating expenses increase, business owners need help, now more than ever, to finance their growing costs. If you’re struggling with cash flow, alternative financing options may be just what you need right now.