Accountants & Auditors
Accountants, auditors, and bookkeepers experience extreme seasonality. Demand for their services is borderline insuperable during tax season but drops immensely on the opposite side of the year. So, when it gets busy, the usual resources do not suffice. Many accountants increase staff during tax time to handle the massive workload. Without more help, an accountant could easily be forced to work over 80 hours a week and risk careless mistakes due to exhaustion. But they can’t just hire anybody. Finding qualified employees has long been one of the top challenges for accountants, who must take the time to train new hires and offer competitive salaries.
Auto Repairs & Sales
It costs a lot of money for auto repair shops to maintain the same service level all year round. Their services require expensive equipment, plenty of staff, and of course, a healthy arsenal of auto parts. These expenses become more difficult to meet when equipment breaks or lengthy projects arise. A series of projects involving expensive or large quantities of auto parts could easily compromise most operational funding. Car dealerships face similar dilemmas when their assets get tied up in new cars and trade-ins. The industry is also highly seasonal, despite the need to pay dealership fees, run marketing campaigns, and offer steep discounts throughout the year.
Aviation Flight Schools
Flight schools play a vital role in training the pilots of the future. But they often struggle to stay in business due to tight profit margins, huge monthly expenses, and the inability to devote more cash to attracting students. Like any other business, the high amount of money flight schools take in is merely a notion of the high costs of keeping them open. Insurance policies for the typical aircraft used by flight schools cost around $5,000, and repairing them can cost even more. Since most of the school’s planes are likely of the same age and model, there’s a good chance multiple planes will need repairs simultaneously. This eats up funding that would have otherwise been spent on upgrades, crucial for maintaining a technologically up-to-date reputation.
Beauty Salons & Spas
Each of the products listed above can suit a different type of expense or cash flow issue. For example, beauty salons are especially prone to temporary, occasional dips in revenue. Demand can rise and fall at any moment. This situation is best suited for a Working Capital Loan or Business Line of Credit. Borrowing amounts for Working Capital Loans are directly based on your operational expenses. Thus, if you’re looking to get through a rough patch lasting a few months or so, a Working Capital Loan can allow you to continue serving your customers as usual. On the other hand, a Business Line of Credit is more cost-effective if you’re looking to cover operational expenses for a much shorter period or secure a moderately-priced one-time expense. Popular examples of such costs include extra supplies, inventory, or new equipment. You’ll pay less interest on a line of credit if you pay off the full balance as quickly as possible.
Child Care & Day Care
Any parent knows the cost of quality daycare has risen considerably. This is primarily an outcome of the increased need for daycare, now that it’s more common for new parents to have full-time jobs. But like any other business, the amount of money daycare centers take in is merely a reflection of the amount of money it costs to stay in business and maintain their customers’ trust.
Hard assets like playgrounds, toys, couches, storage areas, cribs can cost you about $600 per child. Everyday equipment must be regularly replaced, on top of continuous expenses like cleaning supplies, food, crafts, and office supplies. Then there’s your increasingly necessary marketing budget, which is likely to rise now that more and more daycare centers are opening throughout the country. Between these expenses and rent, property taxes, insurance, and maintenance, daycare operators can expect profit margins of roughly 5%.
United Capital Source is proud to be facilitating Small Business Loans for Child Care & Day Care Centers across America. Like other customer service businesses such as senior healthcare centers and restaurants, child care businesses require refurbishment to stay competitive. Contact us today for your FREE business funding consultation!
Cosmetics Store
Like countless other industries, cosmetics has become significantly more competitive over the past decade or so. In addition to major department stores and chains, smaller cosmetic companies must compete with eCommerce giants and independent beauty entrepreneurs who seem to be popping up every day.
Demand has changed dramatically as well, largely thanks to the increasing availability of specialty or niche products. Customers who have skin allergies or only wish to use natural ingredients can now find exactly what they need. Then there’s the undeniable success of social media influencers, who release photos promoting certain products or video tutorials that show how to apply them. As you can see, staying up-to-date in the cosmetics industry is no easy feat. In an age when customers can seamlessly find all types of products online for competitive prices, cosmetics stores must continuously prove the value of an in-person experience.
Dentists & Dental Surgeons
The requirements for a successful dental practice have changed dramatically as of late. Newer technology provides less invasive ways to perform services like x-rays and fillings. Then there’s the need to consistently market your practice to patients looking for low-cost plans. Covering these expenses would be easier if dentists didn’t have to wait weeks (or even months) to receive reimbursements from insurance carriers. And when you’re preparing for the busy season, delinquent payments can’t stop you from obtaining the necessary resources to meet the upcoming surge in demand. United Capital Source has access to dental practice business loans that intend to stay competitive despite their tumultuous payment structure.
Doctors/ Medical Practices
Doctors are the last people you’d expect to need extra cash. While annual salaries for medical professionals may be quite rewarding, the same cannot be said about the payment structure for a medical business. Between insurance reimbursements and patient co-pays, it can take several months for doctors to receive the full payment for their services. This can make it challenging to cover recurring expenses like payroll and inventory. And when the busy season arrives, doctors need plenty of help and can quickly go through supplies. United Capital Source has access to small business loans for medical practices to bridge these gaps in cash flow so healthcare professionals can serve as many patients as possible.
E-Commerce or Internet Sales
eCommerce no longer has many entry barriers, so virtually any business owners and retailers can launch an eCommerce website to sell all kinds of products. Factor this in with the massive Amazon goods catalog, and you’ve got a highly-saturated market. Unless businesses regularly manufacture their own products, they must regularly expand their selection with unique products to increase average order value. Since eCommerce businesses exist entirely online, online merchants must rely exclusively on digital marketing solutions for their eCommerce websites to stay relevant. But with so many digital marketing solutions available, eCommerce businesses must take advantage of any tools to generate quality traffic. Converting that quality eCommerce traffic into profits is also aided by consumer finance with consumer credit products like Affirm that help customers finance their purchase. With the advent of consumer finance and consumer credit products, another barrier to building a successful online business has been in the United States has been lifted.
Equipment & Furniture Wholesalers
Equipment and furniture wholesalers are constantly trying to improve efficiency and work with bigger clients. To fulfill their larger-than-average requests, they need advanced equipment and a lot of it. Inventory must be purchased when it makes sense for their budget, while additional staff can ramp up productivity and bring in more business. Bigger clients process invoices quickly but pay late. Despite all the money that goes into filling their orders, equipment and furniture wholesalers often wait over 90 days to be paid in full. This elongated business cycle makes it very difficult to stay current on bills, let alone move forward with growth-related initiatives. Your vendors probably aren’t as lenient as you are when it comes to extending credit, even in the event of a slow period. Productivity is stifled as well because rather than devoting your full attention to filling orders, precious time is wasted sending emails and making phone calls to get a sense of when your payment will finally come in.
Franchises
Franchises are consistently vulnerable to cash flow issues thanks to the many mandatory expenses they face throughout the year. On top of operational expenses and growth-related investments, franchises must obey their parent company’s fee guidelines, or “Franchisor.” Royalty and advertising fees are deducted from weekly or monthly sales. Some franchise owners must pay for new employees to undergo special training programs. Certain upgrades might be required for specific dates, and the national marketing campaigns that come from the aforementioned deduction must usually be supplemented by local advertising.
The challenge is even greater for franchise owners looking to open new locations. They must pay a “franchise fee” amounting to tens of thousands of dollars, and the aforementioned deductions begin as soon as the new location opens its doors. Combine these expenses with inevitabilities like new equipment or furniture, and you can see why business loans are popular for franchises. Multiple large expenses can easily pile up simultaneously, making it extremely difficult to raise profits or save money.
Gas Station with Convenience Stores
Like many industries, the standards for a successful gas station and convenience store have risen significantly as of late. Today’s gas stations must have an above-average amount of pumps, an expanded convenience store selection, and an updated appearance to attract visitors. All three changes might not be so difficult to implement, were it not for the notoriously low profit margins of gasoline sales. You’d think that rising gas prices would make these numbers go up, but this is not the case. In fact, higher prices are more likely to steer visitors away, especially if there is nothing about this particular gas station that makes them want to stop by. This is where the need for additional funding comes into play. The competition will eventually eat up gas stations that lack the three aforementioned features. Even the lowest prices in town can be easily overshadowed by outdated and/or insufficient pumps and signage.
Gymnasiums & Fitness Centers
Each of the products listed above can suit a different type of expense or cash flow issue. For example, let’s say you need to replace some equipment or install new flooring. Since this is a long-term investment, we might recommend a Business Term Loan, Equipment Financing, or SBA Loan. Unlike your bank, you don’t need entirely consistent cash flow or a massive bank balance to access these three products from United Capital Source. After all, the best time to begin renovations is during the slow season. We can even customize your terms to coincide with the amount of time it will take your investment to contribute to revenue.
For less expensive initiatives like ordering new workout tools, we might recommend a Business Line of Credit. You could order the machines just in time for a busy period and pay off your balance quickly, which significantly lowers your interest rate. And as long as you pay back what you borrow, that money becomes available again. To clarify, you wouldn’t have to continuously apply for funding every time you need to order a new set of weights, dumbbells, etc.
Wholesalers
Each of the products listed above can suit a different type of expense or cash flow issue. For example, let’s say a hot new item has emerged, and you know your customers will be interested. If most of your working capital is compromised, you could secure the order with a Business Line of Credit. This is the ideal option for moderately-sized, short-term expenses. Your interest rate is lower when you pay off the balance as quickly as possible. And as long as you continuously pay back what you owe, that money becomes available again. In other words, you won’t have to apply for funding every time you need to order extra inventory. This makes a Business Line of Credit similarly appropriate for bridging gaps in revenue since you know your customers will pay you shortly. Another suitable solution for long payment cycles is Accounts Receivable Factoring. You would sell the unpaid receivables for a discount price (at least 85%). Instead of waiting weeks or months for compensation, you’d get cash in just a few business days.
Healthcare & Seniors Centers
Advancements in medicine and related technology have resulted in a longer life expectancy. Today’s senior citizen population is healthier than ever but expanding at a rapid pace. Assisted living and end-of-life care centers must therefore adapt to the lifestyle and growing number of new retirees. Renovations and environmental upgrades can fulfill their need for more community interaction and wellness programs. Updated machinery and furniture can accommodate different health conditions as well as provide a heightened level of comfort. Then there’s the logistical need for more staff, supplies, and living spaces to meet inevitable increases in residents. These crucial purchases and growth efforts would be a lot easier to achieve, were it not for the ongoing cash flow problems of assisted living and end-of-life care centers.
Hotels & Lodging
Each of the products listed above can suit a different type of expense or cash flow problem. For example, hotels often face the dilemma of preparing for the busy season during the slow season. They can upgrade their furniture and amenities and launch advertising campaigns while potential guests are planning upcoming trips. Two logical solutions for seasonal issues are a Merchant Cash Advance and a Business Line of Credit. A Merchant Cash Advance is particularly appropriate for hotels because most of their guests pay via credit card and make reservations ahead of time. This gives hotels a reasonably clear picture of how much revenue from credit card sales they’ll generate in the coming months. The borrowing amount and cost for a Merchant Cash Advance are based on previous and future credit card sales. You can get approved when business is slow, make your necessary investments, and not have to worry about making substantial payments until the busy season begins.
Insurance Agencies
Insurance companies must prioritize growth to survive in this increasingly competitive industry. But for many young or small agencies, there’s no easy path to the structures and resources required for expansion.
New business, for example, is among the most important drivers of organic growth. Agencies must devote substantial time to generating new client relationships and addressing their individual needs. But neither is possible without the ability to recruit additional salespeople and maximize exposure to your target clientele. Significant technology investments may be necessary for serving certain accounts, especially when you consider the myriad innovations that currently stand to disrupt the traditional broker model.
In addition to improving sales and advertising, consolidation is likely on the horizon for any agency looking to put their stamp on the marketplace. Owners have concluded that size matters and are trying to enlarge their agencies as quickly as possible. Acquisition is becoming a highly sensible option for agencies that wish to invest in the next generation of leadership and don’t want to relinquish control by being bought out.
Jewelry Stores
You don’t have to be a business financing expert to envision the tremendous amount of working capital required to run a jewelry store. As if the materials used to make their products weren’t already expensive enough, their costs have risen over the past few years. Profit margins, however, have reportedly decreased, especially on diamonds.
Some stores attempt to offset these obstacles by doing more repairs and custom work, which come with their own costs. Others order more or less of certain items. While jewelry does maintain its worth longer than conventional retail products, anything loses value when tastes change. It is also easy for jewelry stores to order too much inventory at the wrong time and ultimately reduce working capital. Digital marketing has become increasingly important for jewelry stores as well.
Landscaping Services
Each of the products listed above can suit a different type of expense or cash flow issue. For example, one of the biggest challenges of landscaping businesses is seasonality. Demand drops when temperatures do the same. But once the weather changes, landscaping businesses must recruit workers and secure equipment to prepare for the busy season. Landscaping Business Loans can provide the means to acquire both resources in the weeks (or even months) beforehand.
Logical solutions for this common dilemma include short-term Working Capital Loans and a Business Line of Credit. Working Capital Loans are typically best for keeping the business running during slower months since the borrowing amount is directly based on monthly bills. On the other hand, a Business Line of Credit makes more sense when the slow season comes to a close. Interest rates are lower when you can pay off the full balance as quickly as possible.
Laundromats & Dry Cleaners
Laundromats depend on large amounts of essential equipment and, therefore, must keep them in top shape. But it’s only natural for washing machines and driers to break down, especially older models. If one machine breaks, there’s a good chance another one made in the same year will follow suit.
In addition to broken machines, laundromats often deal with plumbing problems caused by excessive water usage. These issues must be fixed immediately, and not just because new technology is more efficient. Too many “out-of-order” signs will persuade customers to give their business to one of the several other laundromats in the area.
Maintaining an up-to-date supply of machines would likely be a lot easier if it was not for the massive utility bills associated with thriving laundromats. They use a high amount of electricity, water, and sewage daily. Monthly rent is incredibly high, which isn’t much of a surprise when you consider the role of location in a laundromat’s success.
Limousines & Rental Cars
Limousine and rental car companies stay competitive by keeping their vehicles up-to-date. They periodically purchase new models and maintain their existing vehicles to ensure a professional appearance. However, buying and maintaining vehicles would be much easier, were it not for the notoriously high costs of insurance and fuel. These expenses become even harder to meet when the inevitable slow season arrives. United Capital Source has access to business loans for limousine and rental car companies looking to cover the rising costs of expanding their fleet and their services.
Liquor Stores
Each of the products listed above can suit a different type of expense or cash flow issue. For example, liquor stores experience a massive surge in demand during the holidays. However, discounts for bulk orders are usually available in the off-season, when sales are down. Liquor Store Business Loans can allow you to purchase large quantities of popular items during slower periods, especially those with high profit margins. Since liquor stores tend to conduct high volumes of debit and credit card sales, a Merchant Cash Advance can be a sensible option for ordering bulk inventory. Your borrowing amount is directly based on monthly debit and credit card sales volume. When sales are slow, your payments are smaller. A Merchant Cash Advance is cheaper when payments are more spread out. Thus, you’d save money when sales drop again after the holidays.
Marijuana Dispensaries
Marijuana is legal in several states but illegal on a federal level. So, on top of the typical problems faced by every retail-related business, marijuana businesses must clear additional financial hurdles stemming from their products’ legal status.
Many marijuana businesses are unable to open bank accounts and therefore deal mostly in cash. This requires high-tech security systems, like 24/7 video surveillance, reinforced doors, and windows. Armored trucks are needed to transport hundreds of thousands in cash regularly.
Businesses that do have accounts with credit unions pay a massive price. There’s an upfront fee of approximately $10,000 to cover financial audits and background checks. Some credit unions also charge at least $5,000 a month for ongoing due diligence and reporting mandated by FinCEN. And since the Internal Revenue Service (IRS) does not permit deductions for businesses involved with illegal substances, marijuana businesses must pay twice or even three times as much in taxes than a conventional retailer.
Maritime Shipping Services
Despite the drastic difference in equipment, the maritime shipping industry is plagued by the same challenges as plenty of conventional small businesses. Thanks to the increasing volatility of ocean freight rates, it is known as a “risky” industry. Changes in the global economy and the number of ships being built can significantly affect demand and earnings.
But despite the decrease in rates, orders have reportedly remained the same.
aving less cash makes it very difficult to repair equipment, which is very common in any shipping-related industry. Rough seas, reduced visibility, and unfamiliar ports can damage sea vessels and docks unexpectedly.
Maritime shipping businesses must be heavily capitalized throughout the year to handle the large-scale cash flow that takes place constantly. And since there’s already so much structural overcapacity, swift repairs are likely more beneficial to the industry than more equipment. This is just one of several elements that need to become more efficient to reduce the impact of unstable rates and diminished returns.
Metal Manufacturing
Metal manufacturing companies must consistently replace and repair equipment to stay competitive. The companies that can accomplish both tasks with the most speed and the most sensible costs have a distinct advantage. They can keep up with surges in demand and continuously take on new business.
Speed is particularly important in terms of testing, researching, and manufacturing products. When you have the resources to produce an increasing amount of options to choose from, there is a higher likelihood of customer satisfaction. In most cases, this comes down to having skilled, trained operators and the right equipment. Every metal manufacturing company either needs new equipment now or will need it soon. All machines have lifespans, which often turn out to be shorter than expected, following the release of more advanced models.
Pharmacies
When pharmacy customers pick up prescriptions, the pharmacy receives a co-pay upfront. The majority of the pharmacy’s income, however, comes from insurance providers. You don’t have to be in the healthcare industry to know that insurance providers aren’t exactly easy to work with. Policies change, prescriptions get billed incorrectly, processing gets delayed, and the only way to stay up-to-date with these issues is to contact the provider yourself.
So, it should be no surprise that their reimbursements often come in several months after a prescription is picked up. If pharmacies don’t keep tabs on providers constantly, there’s a chance they might not receive reimbursements at all. Delinquent payments become even more hazardous when more operational funding gets tied up in inventory, which is already more expensive than conventional retail items.
Private Education/ Schools
The educational path for many children and young adults isn’t as simple as generations past. They don’t just go to one elementary school, high school, or attend a traditional university. Additional resources are required to meet their unique needs or foster their talents. This is the purpose of private learning institutions, including music schools, aviation schools, cooking schools, driving schools, or the increasingly popular trade schools.
The heightened demand for private learning institutions cannot be satisfied without sufficient funding. There’s the matter of obtaining significantly more equipment and learning materials, all of which must be up-to-date so students can apply their skills in the real world. This is especially costly for schools that prepare students for careers in fields like manufacturing or computer science. Should the ongoing demand for their services increase any further, it’s safe to say many private learning institutions will likely be forced to find larger physical spaces.
Real Estate
Real estate companies enjoy levels of success and flexibility other industries cannot offer. But the ability to make their own hours and earn enormous amounts of money comes with a heavy, heavy price. The real estate business depends on the notoriously volatile housing market, which has been known to create a host of cash flow issues for even the most profitable real estate broker agencies and management companies.
As we all learned not too long ago, a good market can easily slip in the opposite direction. Seasonal changes, like demand or the severity of a slow period, are often difficult to predict. The same goes for the true costs of purchasing and maintaining properties, especially of the older variety.
Restaurants/ Bars
If you live in a busy town, you’ve probably seen plenty of restaurants come and go. Despite their vital role in the community, this is one of the riskiest industries in existence. There are too many reasons for a successful restaurant to run into financial trouble. Equipment can break down or become outdated. Employees can quit in pursuit of more normal hours. And to stay in such a desirable location, you must be prepared for astronomical monthly rental costs. United Capital Source has access to Restaurant Business Loans & Equipment Financing to help restaurants conquer these hurdles so they can continue serving their loyal customers. Restaurant Business Loans can address a multitude of investments, expenses, and cash flow shortages. For example, if you’re looking to replace an expensive piece of equipment, we offer Equipment Financing in which your desired purchase is used as collateral. Very little paperwork is required, and you’d be able to secure the new equipment in as short as a few business days.
Retail Stores
Each of the six products listed above can suit a different cash flow-related dilemma. For example, many retail stores are highly seasonal. Depending on the items you sell, demand might fall or drop significantly during the winter or summer. But since the busy season comes right after the slow season, stores must use this period to prepare for the surge in demand. This might include stocking up on inventory, hiring more sales associates, or ramping up your advertising.
A Merchant Cash Advance is often an appropriate tool for these initiatives because retail stores tend to perform high debit and credit card sales volumes. The higher your monthly debit and credit card sales volume, the more you can borrow. And since payments are directly tied to sales, you’d make smaller payments during the slow season. Thus, you could make the investments mentioned above during the slow season to maximize the busy season’s performance. A Merchant Cash Advance is even cheaper when your payments are more spread out, so you’d save money by applying well before the busy season begins.
Veterinarians & Animal Hospitals
oday’s pet owners are extremely different than generations’ past. They care for their pets as if they were furry children and are therefore much more serious about protecting their health. Veterinary practices and animal hospitals must maintain the capabilities to attract and serve these dedicated pet owners as their industry becomes increasingly competitive.
One way practices are adapting to this new landscape is expanding in size. This includes adding physical space, acquiring an existing practice, or opening multiple locations. Few practices, however, can afford the construction or real estate on their own, and those looking to acquire with their own funds often get outbid by corporate buyers.
Animal hospitals can now perform highly sophisticated operations, but only if they have the means to stay up-to-date with equipment and technology. This might become more difficult soon, thanks to pet insurance or late-paying owners. As if cash flow wasn’t problematic for practices and hospitals already, both businesses could find themselves awaiting compensation for major procedures shortly before they are expected to meet recurring or sudden expenses.
Construction/ Contracting
Each of the products listed above can suit a different type of expense or cash flow issue. For example, let’s say a business owner needs a little extra money to purchase more supplies, new equipment or cover payroll until the next phase of the project is complete. Logical solutions to these construction company dilemmas include a short-term working capital loan or business lines of credit.
The decision typically depends on how long it will take you to repay the loan amount, as well as the likelihood of needing a construction loan again soon. Sudden expenses and cash flow shortages are prevalent with construction businesses. Thus, a business construction line of credit would prevent you from having to apply for more funding every time you’re unable to cover a short-term expense.