Using A P2P Loan to Bridge Gaps in Receivables

Many businesses extend favourable credit to their customers in the form of delayed payment, which becomes part of their receivables. This is the income your firm has earned for providing goods or services but has not yet received.

However, this creates a cash gap in working capital for day to day operations. Even if your business is certain it will be paid in full, you may need free available cash for ongoing projects and expenses. This is pivotal for companies conducting large shipments or capital-intensive projects that require larger amounts of working capital for continued operations. Unforeseeable circumstances requiring free cash during a receivables gap can be devastating to your business operations. It will then require efficient working capital management.

There are specific industries that require capital-intensive inputs, high labor costs, and inventory. They often have high working capital requirements. These include:

  • Construction
  • Engineering
  • Aviation
  • Textiles
  • Real estate firms

However, any company extending a large dollar value amount of credit in the form of accounts receivables to customers can benefit from a small business loan.

How does a P2P small business loan play a role here?

Using a small business loan, your company can continue to operate smoothly during the gap and minimize the risk of business failure. A small business loan can provide your company with short-term debt financing for your various capital requirements.

Historically, commercial banks have been little help in bridging the cash gap due to the long and selective loan approval process. Emerging online lenders have stepped in to provide fast access to capital but at significantly higher interest rates. This is where Lending Loop fills an unmet market need – providing relatively low-interest rates, fast access to capital, and a fair approval process to help small businesses reach their goals.

Lending Loop fulfills loans much quicker than a commercial bank, and our rates are lower than other online lenders who charge a higher APR. Using a small business loan, you are achieving efficient working capital management, as well as building up your credit score for future financing needs.

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