Sustain Your Business with Lamina’s Temporary Financing Options

When it comes to your finances, maintaining and securing a steady cash flow is paramount to a business’s long-term health and success. Normally, that would come from your income, however, unforeseen expenses, seasonal downturns, or sudden growth opportunities can create temporary financial gaps that (if left unaddressed) may jeopardise your operations. Successfully navigating these periods effectively often requires a strategic infusion of capital to keep you going at critical moments. Temporary financing options provide that vital lifeline to help your business survive, providing as they do necessary funds to overcome short-term challenges and stay afloat without also committing to long-term debt that could counter those gains you made. Understanding the available solutions is the first step toward building a resilient and adaptable enterprise.

Here are several temporary financing options from Lamina that can help sustain your business through its financial ebbs and flows.

1. A Business Line of Credit

Think of a business line of credit as a flexible and reusable source of capital. It’s a pre-approved facility that allows you to draw funds (up to a certain limit) whenever the need arises, functioning rather similarly to a credit card. You only pay for what you use, making it an excellent tool if you have a clearly defined budget, and as you repay the principal, the full amount becomes available to you again. This revolving nature also makes it convenient in case of unpredictable expenses, covering payroll while waiting for a large cheque to clear, or simply having a financial safety net in place for greater peace of mind.

2. Invoice Financing

For businesses that operate on an invoicing model (such as providers of travel coffee mugs within Canada), waiting 30, 60, or even 90 days for customer payments can strain cash flow significantly. Invoice financing (also known as accounts receivable financing) unlocks the value tied up in your outstanding invoices. How it works is that a provider advances you a large percentage of the invoice’s value upfront. Once your customer pays the invoice in full, you receive the remaining balance, minus a service fee for the provider. This method can immediately and directly convert your sales into immediate working capital, allowing you to use that outstanding capital to be put to work fuelling your day-to-day operations without delay.

3. A Merchant Cash Advance

Tailored for businesses with a high volume of debit and credit card transactions (such as retailers or restaurants) a merchant cash advance supplies an immediate lump sum in exchange for a percentage of future sales. Repayments are automatically deducted from your daily card receipts to repay that borrowed sum. This structure’s key feature is its flexibility; when sales are strong, you repay more quickly, but when sales slow down, the repayment amount decreases proportionally. This allows you to repay your obligations in accordance with your business’s performance and gives you a little breathing room as you repay that sum.

4. Equipment Financing

Growth often requires investment in new technology, vehicles, or machinery. However, rather than cut into your coffers to invest in those developments, you can instead utilise equipment financing to acquire these essential assets without cutting into your coffers. To give one example, if you’re on the lookout for a Canadian commercial refrigerator, a financial institution might provide the necessary influx of capital to help you acquire it for your business. The new equipment itself serves as security for the arrangement. You receive the funds to purchase the necessary tools and make regular payments to repay them over a predetermined term. This allows the new asset to start generating revenue immediately (helping it pay for itself over time while also keeping your capital free for other business priorities).

5. Short-Term Business Funding

When a specific, time-sensitive opportunity or need arises (such as purchasing bulk inventory at a discount or launching a targeted marketing campaign), a short-term capital infusion can be the ideal solution to allow you to capitalise on that windfall. This involves receiving a fixed sum of capital that you repay over a shorter period (typically from a few months to a couple of years). Repayments are usually made on a fixed schedule, which provides a level of regularity you can more easily budget for over time.

Sometimes, all you need is a temporary source of funding (whenever the unexpected strikes, for example). In that case, these methods can give you a little security for those sudden financial shocks without requiring you to dip into your emergency funds. Keep them in mind to help you stay afloat in case life ever pulls the rug out from under you.