As Inflation Surges, Now's the Time for Small Businesses to Invest in Long-Term Cost Savings, Says Fintech Leader

Affordable short-duration financing can do more than just pay the bills, according to BusinessLoans.com

CHARLESTON, S.C., April 13, 2022 /PRNewswire/ -- Inflation continues to rise at its fastest pace in 40 years, as consumer prices jumped 8.5 percent in April, putting a pinch on small business owners.

According to the National Federation of Independent Businesses, inflation is the top concern for U.S. small business owners. Faced with supply chain disruptions and struggles to find qualified staff, more small businesses have turned to financing and loans to pay for operational expenses, rather than investing in their businesses, per the Federal Reserve.

"The entire small business economy is being crushed by inflation right now," said Andrew Gonzales, president and co-founder of BusinessLoans.com, an online lending platform and fintech provider that serves small businesses. "The winners will be companies that keep a long view and make smart investment decisions now to help drive down long-term costs."

Gonzales is seeing forward-looking companies use financing to make investments in three key areas:

1. Technology that can drive out other costs 
Any tech investment that can lower fixed costs can pay off in the medium to long term. That can mean investing in digital records keeping or in automated revenue management services to streamline tasks like data entry and billing. Digitizing your manual work processes can help you do more with less.

2. Marketing that focuses on customer retention 
Customer acquisition is expensive. In difficult economic circumstances, customer loyalty can make the difference between success and failure. Loyal customers can be counted on to keep revenue streams steady and maintain margins.

One of the best ways to incentivize repeat business is to create a loyalty program. Offer discounts to repeat customers, rewards programs for frequent customers, or any other kind of benefit in exchange for a membership fee. These kinds of programs can dramatically increase customer retention rates, reducing the costs you would otherwise have to pay to keep acquiring new customers.

3. Bulk purchasing that drives down unit costs 
When you're facing significant inflation, every dollar you spend today is worth more than the dollar you spend tomorrow. Buying what you can in bulk allows you to reap cost savings now by leveraging the higher purchasing power of today's dollar. Bulk buying is a good strategy during low-inflation periods, and a great one during high-inflation periods. Often, it's even worth it to take out a loan just to acquire extra inventory or supplies in bulk today.

"Spending more to save more may seem paradoxical, but it works," said Gonzales.

About BusinessLoans

BusinessLoans.com is a leading online lending marketplace helping small businesses meet their financing needs through partnerships with top lenders and their proprietary matching technology. BusinessLoans.com connects business owners with lending professionals that are handpicked to help fund your capital needs. With loan standards frequently changing, they stay on top of it all for you to deliver the right lenders at the right time.

SOURCE BusinessLoans.com