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Using financing solutions to better manage your cash flow

A grocery store owner managing inventory.
Tzvi Pollard Director of Payment Partnerships
Published at | Updated:

Running a small business is hard. As a small business owner you probably take on so many roles: sales, services, inventory, invoicing, and of course, cash flow management

Maintaining healthy cash flow for your small or medium-sized business (SMB) means navigating through a maze of financial challenges, in which every dollar counts. 

In this article, we’ll cover some common cash flow issues you’ll probably find all too familiar. We’ll also discuss Melio Financing, a new feature that can help SMBs cope.

4 common cash flow issues plaguing small businesses

Did you know that 82% of small businesses that shut down cite cash flow issues as the reason for their downturn? To understand why that is, let’s review some of the cash flow problems SMBs tend to face.

Uneven revenue streams

Fluctuations in revenue due to seasonal demand or market trends can disrupt cash flow, making it challenging to cover expenses during slower periods.

Slow-paying customers

Late or delayed payments from customers can strain your cash flow, impacting your ability to meet immediate financial obligations and invest in business growth.

Operational expenses

Covering ongoing costs like rent, utilities, inventory, and payroll while maintaining sufficient working capital can be a delicate balancing act. This becomes even more complicated when you’re faced with unexpected expenses like repairs or a lost contract reducing your expected income.

Limited access to traditional financing options

Traditional financing opportunities come with strict requirements and lengthy approval processes. This makes it difficult for small businesses to secure the necessary funds in time to save their cash flow.

Introducing Melio’s pay over time feature

If your business is experiencing some of the issues outlined above, we may have just the thing for you.

Melio’s pay over time, a new financing solution, does exactly what its name suggests. It allows you to pay net 30 or divide the payment into 1-12 monthly installments while your vendor gets paid today. 

Let’s count the ways in which Melio’s pay over time solution helps your business’s cash flow.

1. Deferring payments

Pay over time enables small businesses to defer payments for goods and services until they have enough cash to cover them. This means you can pay for whatever your business needs right now, without depleting your cash flow, even during lean periods.

2. Bridging payment gaps

Pay over time can help bridge the gap between delivering products or services and receiving customer payments, ensuring a steady cash flow and reducing the need to chase late payments.

3. Simplified budgeting

By breaking your payments down into manageable installments, financing makes it easier to plan and stick to your budget. It also provides greater control over your cash flow.

4. Instant decision

Melio’s financing solutions are designed to be accessible and streamlined, with quick approval processes that provide small businesses with timely financial support. In other words, we won’t keep you hanging: You’ll know immediately whether your financing application was approved or not and exactly how much you’ll be paying and when.

5. Opportunity for growth

With improved cash flow and increased working capital, financing allows small businesses to invest in revenue-increasing growth initiatives, such as expanding product lines, launching marketing campaigns, or upgrading equipment.

How to use Melio’s pay over time solution

When paying a bill with Melio, just choose pay over time as your payment method.

If this is your first time using Melio Financing, you will need to fill out a short application. You’ll receive an answer in real time, so you’ll know immediately whether you’re eligible or not. Once you’re approved, you’ll be redirected straight to selecting your repayment plan and you won’t have to apply again the next time you want to use the feature.

Want to learn more about how it works? Check out our help center.

Ready to get started?

Sign in to your Melio account. Don’t have an account yet? Sign up for free to start enjoying the many benefits of Melio’s business-to-business (B2B) platform, including its new pay over time feature.

*This blog post is intended for informational purposes only and is not intended as financial advice.
**Melio does not provide legal, tax or accounting advice, and you should consult with a professional advisor before making any financial decisions.