MSMEs are the backbone of the Indian economy, and these businesses sometimes face cash flow problems due to insufficient liquid cash to cover liabilities. Often, MSMEs approach banks for loans that may take over a month. Or, may be the small to medium businesses face loan rejection to various reasons.
With so much buzz in the business, it’s challenging to keep up with formalities of the banks. So, to solve the issue and to maintain continuous cash flow, reliable NBFCs like Red Fort Capital provide immediate financial help and approve loans within 24 hours.
So, here are the most common cash flow problems any MSMEs face and their smart solutions!
1. Too Much Inventory
For business, maintaining inventory is one of the most critical tasks. It’s the first step towards success, but non-management of inventory can lead to cash flow problems. Businesses often over-invest in inventory, which may cause trouble if sales don’t cover investment costs.
The price to create each item is more than what you paid your supplier for it. Having extra stock is helpful, but loading inventory without proper evaluation leads to loss.
The solution to overcome inventory problems is by managing inventory properly. However, if the scenario affects your cash flow, you can contact Red Fort Capital, which offers quick inventory purchases loans. The terms are quite flexible and straightforward. This will help you avoid debts raised from inventory billings.
It’s good news for any business if they’re growing rapidly. But, over-trading often gets in the way of healthy cash flow. As you expand your business rapidly, you have to spend more money.
It may include developing workforces, wages, raw materials, inventory, advanced tools etc., so meeting customers’ demand while spending more on the backend process disrupts the cash flow.
With working capital loans, you can easily restore cash flow when you are overwhelmed by rapid sales growth. At Red Fort Capital, your loan to overcome the cash shortage will be approved within 24 hours. In addition, you don’t have to visit our office with a bundle of documents. As we offer a complete digital experience, you can apply for a loan with a few clicks.
3. Low Trading in Off-Season
Generally, many businesses have high sales in peak season and maintain a stable cash flow. But, during the off-season, the cash flow suffers severely due to no sales. This affects and slows down overall growth significantly.
Business owners can apply for term loans to deal with cash flow problems during the off-season. It is a popular form of financing for MSMEs. Red Fort Capital provides the business with funding in exchange for cash or valuable assets.
So, as soon as you have met your needs, you can choose the repayment options based on your income in the peak season. The process is quick, effortless and helps you deal with a temporary cash-flow shortage.
4. Late Receivables
One of the most common and complicated problems is late receivables. Cash flow may be negatively affected because you do not receive your payment until a fixed period. In addition, costs for raw materials, labour, and inventory are not recovered until you receive full payment.
You can manage the cash flow problem due to late payments by utilising the advantage of receivable financing. It takes out a loan against its invoice assets. Thus, if you have the right bills, future projects, and current bills, you can get beneficial loans to bring your cash flow back on track. One of the most practical advantages of taking a loan from Red Fort Capital is that it can be approved within 24 hours, and expert advice is provided.
5. Construction Debts
Support contractors, subcontractors, and businesses in the construction industry often face cash flow problems. These projects need time for completion, and to keep them moving, there must be a regular flow of wages and workforce expansion. In addition, the process may need new machinery, raw materials and lots of additional costs.
Red Fort Capital offers construction finance to maintain healthy cash flow for a longer duration. You can use the funds to pay bills and update machinery. Our financing is flexible as we provide funding for completed and partially completed work.
In addition, you can submit outstanding bills or invoices for payment—and we will approve the loan within 24 hours, and you will receive funds within a week.
When you Don’t Know What the Problem is?
Many business owners dealing with hundreds of payments don’t know why their cash flow is suffering. They can’t rule out one possible reason. Red Fort Capital is here to help you in such a scenario.
We offer guidance and look forward to maintaining a long-term partnership. Our financing services aim to satisfy every type of MSME. As a result, we have adopted some fantastic features like:
● Higher loan disbursal amounts ranging from Rs1 to 10 Crore
● Longer tenure of loans so that you can focus on your primary goals
● Hassle-free quick approvals within 24 hours and funding within a week.
● A digital process and simplified documentation.
Case Study 1 – Plastic manufacturing firm
Plastic film manufacturer approached Red Fort Capital for working capital loan to buy equipment. The company needed EMI flexibility & principal deferment. To help them, we provided a customized EMI schedule, created a principal reserve, and funded the loan in just ten days.
Case Study 2 – Transportation company
A Transport company based in Jaipur was struggling with its daily expenses as they received payments 60 days late from clients. To cover day-to-day expenses for fuel, buy new trucks, etc., the company approached Red Fort Capital, we approved the 8 Cr loan demand of the transport firm within a week.