Hiring employees is one of the most impactful decision business owners will make. While good hires can positively impact cash flow, there is always a ramp-up period in which your business will need to meet payroll. This diminished cash flow can restrict other revenue generating activities. By planning ahead and securing financing options prior to hiring, you can meet payroll without leaving your business strapped for cash.
Many business owners find that traditional funding sources are not keen to provide financing to ramp-up hiring. You cannot use new hires as collateral, new hires are not guaranteed to improve financial health, and lenders have a hard time calculating the value of a new employee.