Some small business owners feel jealous of places such as restaurants and retail stores. Businesses that deal with end consumers frequently have a high volume of capital coming in day after day, month after month.

When it comes to healthcare practices, resellers, manufacturers and service providers, funds don’t always flow so freely. It’s common for there to be large gaps in available capital, which can cause significant problems with cash flow. If this issue sounds familiar for your business, it’s time to apply for business lines of credit.

What Is Cash Flow?

In simple terms, cash flow is the balance of money coming in versus money going out. A positive cash flow is when you have more working capital than you need to cover your operating costs. Negative cash flow is the opposite: It means you’re struggling every month to come up with the funds to pay your bills.

Healthy cash flow needs to be either perfectly in balance or positive. That way, you have funds, not just to cover your monthly needs, but also to invest in business growth. Problems with poor cash flow can hurt a business’s ability to keep up with competitors, and it can trigger a downward spiral where you don’t have the funds to generate more revenue.

What Causes Working Capital Gaps for Some Small Businesses?

First, recognize that cash flow problems usually aren’t your fault. Some businesses can experience issues even if they’re managed perfectly.

One problem is not selling enough products. This can happen during slow periods. For example, construction companies have to plan to deal with fall and winter slowdowns.

The second issue is slow payment by customers. Insurance companies and large corporate clients sometimes demand three to six months before paying invoices. As a small business owner who depends on these businesses for profit, you may have little choice but to accept those difficult terms.

How Can Lines of Credit Help Your Cash Flow?

The key to resolving cash flow issues is often to redistribute your finances. It’s not a question of forcing your team to sell more or work more (though more revenue can’t hurt). The main problem is that you don’t have the funds on hand when you need them.

Lines of credit are a perfect solution. They provide available working capital at excellent rates anytime, for any need. You can cover payroll, inventory purchases, lease payments, and other needs on time, every time.