5 Ways to Make the Most of the Holiday Season With Private Lending

The holiday season is typically the busiest time of year for many industries, including e-commerce, logistics, and staffing, to name a few.  2021 is looking up, as the year winds down despite businesses facing temporary closure of operations that led to significant losses during the pandemic in 2020. According to PR Newswire, Deloitte forecasts that holiday retail sales will reach between $1.28 trillion and $1.3 trillion from November 2021 through to January 2022. This trend will continue through the first quarter of 2022 and beyond.

With so many opportunities to generate significant additional revenue, many small and medium-sized business owners have turned to private lending for an immediate boost of capital to propel them through the end of the year and into 2022.

This is due to several factors, including the speed with which private lenders can move, the minimal amount of documentation required, and the ability to truly customize deals, including early payoff incentives that can cut the cost of capital down dramatically for businesses that only need the capital through the holiday season and can pay off the debt shortly thereafter. Some of the best use cases for these merchants include:

Inventory

With an all but guaranteed surge in sales upcoming and supply chain issues looming, it is imperative to take advantage of any opportunity to purchase materials in bulk and/or at a discount. When such opportunities arise quickly, it is crucial to have a relationship with a private lender that can quickly supply you with a truly customized deal designed to maximize your ROI by saving you money on the cost of funds.

Every business varies in operational needs such as inventory reorder levels, shipping processes and costs, and vendor pricing. All these can be factored in when determining the type of funding and the required amount to meet market demand. Inventory financing, among other alternative funding sources, is a great option to ensure a business stays afloat during this holiday. This type of financing ensures the business owner never runs out of inventory and avoids seasonal bottlenecks.

MobyCap not only routinely funds customers within 24 hours but can also include early payoff incentives that dramatically lower the cost of capital if customers can pay off the balance early. The ideal use case in this scenario would be taking the money, purchasing inventory at a discount, selling it quickly, and immediately paying off the remaining balance for the lowest possible rate.

Marketing

Assuming business owners already have what they need to provide goods and services to customers, another crucial component of the sales cycle — especially during times when you know consumers are shopping — is the ability to market to the ideal audiences. Whether online or via social media, print, radio, or snail mail, the holiday period is far and away the best time to generate marketing ROI for many businesses.

It’s safe to assume that, with the economy slowly gaining traction, other businesses are looking forward to this holiday season to achieve high sales. In addition, retailers can take advantage of events such as Black Friday where shoppers are looking for great deals. In anticipation of making profits, businesses may need funds to stock up and cover logistical costs. This period being a largely digital era means a business has to invest heavily in a digital marketing plan that promotes satisfactory customer service and brand positioning. This is the time to work on increasing customer acquisition and creating targeted ads which can be costly for small businesses. The global annual spending on digital ads in 2021 is expected to reach $389 billion.

Capital, among other factors, plays a big role in a business positioning itself in anticipation of the influx of shoppers this holiday. Quickly acquiring the funds, deploying them as marketing spend, generating an influx of business, and paying off the remaining debt would be an ideal way to utilize private funding in this scenario.

Bridge Funding

Because the holidays are typically hectic from a day-to-day perspective, cash flow shortages can be extremely detrimental to normal operations. For merchants dealing with lapses in cash flow due to slow-paying customers, temporary drops in revenue, or other common reasons, short-term funding can sometimes be the difference between shutting the doors for good and continuing business as usual.

While rates can vary depending on the circumstances, this is often a small price to pay for a rentable partner who can help you navigate through good times and bad. Moreover, the early payoff incentives would minimize the cost of capital if things returned to normal sooner rather than later.

In this case, having a relationship with a lender like MobyCap implies that emergency funds are only a phone call away. The business owner also does not have to worry about rigid rates as we offer flexible terms so they can borrow comfortably without stalling cash flow. If anything, the holiday season should be a period for a business to rebound from any slow periods it may have experienced previously throughout the year.

Augmenting Staff

As business picks up and growth accelerates, many businesses find themselves making temporary or permanent additions to their staff during the holiday season. Private lending will provide much-needed funds to offset any labor issues and shipping delays that have disrupted the supply chain since the onset of the pandemic. According to Aaron Cheris, head of Bain’s America Practice, the key challenge retailers will face this holiday season is the tight labor market. This means that firms operating in the supply chain industry will struggle to ensure speedy and efficient delivery of goods to shoppers while ensuring they do not run out of stock fast.

With private lending at hand, it gives the business owner more leverage to meet the customer demands for goods as their warehouse will be replenished with materials sooner rather than later. They will also have competent and enough staff to meet customer orders on time and anticipate any delivery mishaps. With many vacancies to fill, having funds available will enable businesses to offer monetary incentives to attract employees. Take, for example, Amazon is planning to hire 150,000 seasonal employees to cover the holiday shopping activities. The large retailer is also intending to offer a $3,000 sign-on bonus and an additional $3 per hour for specific shifts. If doing so can help generate immediate returns while keeping up with demand and keeping customers happy during the end-of-year rush, the interest paid on the funding necessary to acquire labor is well worth it.

In all this, the business will effectively tackle labor shortages which will ease supply chain operations in the next financial year. In addition, since the business would have the flexibility to hire temporary staff, it could save significantly on staff costs such as insurance and retirement plans. Moreover, we can offer multiple customizable options that allow us to structure the most beneficial deal for merchants under these circumstances.

Adding New Equipment

As the holiday season gears up, small and medium-sized businesses should take advantage of private lending to increase their operational capacities. To capture a portion of the sales revenue anticipated from November, a business owner may need to add more equipment to increase production. Private lending offers the option of accessing equipment leasing, which allows business owners to avoid the huge upfront costs of acquiring equipment.

This can be a great benefit for a small business that needs to be able to produce and supply constant orders.

We have helped businesses secure equipment to optimize their production capacity. Regardless of the industry a business operates in, we can help the founder acquire equipment to ensure they don’t miss out on the much-awaited sales boom this holiday.

Conclusion

As businesses approach the holiday season, it’s important to prepare to meet the expected customers’ demands and take advantage of the litany of sales opportunities. For an increasing number of small business owners, this means starting a relationship with a private lender that is willing to take the extra step to ensure they have a truly customized funding solution. The top pain points that businesses in the supply chain have faced are labor and inventory shortages, which have been devastating. In addition, it avoids making rash decisions such as reducing manufacturing costs or increasing prices as funds are available to fill any gaps. Private lending provides a level playing ground for small and medium-sized businesses to organize themselves to effectively capture additional market share. Even when the holiday season passes, having a trusted private lender close allows for stable running of the operations throughout the life of the business.

MobyCap has consistently proven itself to be capable of helping businesses achieve their potential. This holiday season is no different as markets are expected to be busy with customer purchases both online and in physical stores. We have the funding solutions for whatever needs a business has, such as inventory and staff shortages. You do not have to deal with a lengthy application and approval process when you require immediate cash to refill your shelves. Get in touch with us today.

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