Running a small business means staying on top of every dollar. But with rising operational costs—labor, raw materials, rent, and utilities—it can feel like your profits are shrinking by the day. You’re not alone. Small businesses across the country are struggling with the same problem, and traditional financing options may not always offer the flexibility you need.

But here’s what you might not know: there are lesser-known financial tools that can give you the breathing room your business needs to grow. At Njord Capital Group, we offer more than just loans—we provide strategic solutions designed to keep you afloat, no matter how steep the costs get.

Why Rising Costs Hit Small Businesses Hard

Before diving into solutions, it’s important to understand why operational costs are soaring:

• Labor Shortages and Wage Inflation: With rising minimum wages and the need to attract skilled workers, labor costs have increased dramatically.
  

• Inflation and Supply Chain Disruptions: Prices for raw materials, shipping, and other essentials have skyrocketed due to global supply chain issues and inflation.
  

• Energy Costs: Utilities like electricity and gas are hitting businesses hard, especially in industries where energy consumption is high, like manufacturing and retail.
  

While these challenges are real, the good news is that smart financial strategies can ease the burden—especially if you’re willing to think outside the box.

Powerful Financial Solutions You Might Not Know About

Here are some lesser-known financing strategies that can help your small business tackle these rising costs:

1. SBA 7(a) Loans: Long-Term Flexibility You Can’t Ignore

You’ve probably heard of SBA loans, but did you know that the SBA 7(a) loan can be a total game-changer for everyday operational costs? It’s not just for startups or expansion—it’s a versatile tool that can be used for things like payroll, rent, and even purchasing inventory.

• Pro Tip: SBA loans often come with lower interest rates and longer repayment terms than traditional business loans, making it easier to cover rising costs without a crushing monthly payment. Plus, because the loan is partially guaranteed by the government, lenders are more willing to work with businesses that might not have perfect credit.
  

Basic SBA 7(a) Loan Qualification Guidelines:

• Business Size: Must be a small business as defined by SBA standards, based on revenue and employee count (varies by industry).
  

• Operational History: Your business must operate for profit and typically needs to have been in operation for at least two years.
  

• Creditworthiness: You’ll need a strong personal credit score (usually 680 or higher), although lenders may be flexible with strong business performance.
  

• Ability to Repay: You’ll need to demonstrate a solid business plan and financials that show you can repay the loan.
  

• No Delinquent Debt: You shouldn’t have any defaults on government loans in the past.
  

2. Business Line of Credit: Flexibility at Your Fingertips

When operational costs fluctuate, you need a financing solution that’s just as flexible. A business line of credit is perfect for handling those unpredictable expenses. Think of it as a revolving credit line you can draw from whenever necessary—whether it’s a utility bill that’s higher than expected, a last-minute repair, or buying supplies in bulk.

Here’s the kicker: you only pay interest on the amount you use. If you draw $10,000 from your $50,000 line of credit to cover inventory costs, you’re only paying interest on that $10,000.

• Pro Tip: A business line of credit is also great for seasonal businesses. If your revenue fluctuates throughout the year, this can be a valuable tool to help manage cash flow during slow periods, while having quick access to funds when costs rise unexpectedly.
  

3. Merchant Cash Advances: Immediate Cash Flow for Fast Needs

For businesses that need quick, short-term cash, a Merchant Cash Advance (MCA) offers a fast, no-collateral solution. An MCA gives you an upfront lump sum in exchange for a percentage of your daily credit card sales until the advance is paid off.

While this isn’t a long-term solution due to higher interest costs, it’s perfect for small businesses that need immediate cash to cover rising costs without waiting weeks for traditional loan approval.

• Pro Tip: Use an MCA when you’re expecting a spike in sales (e.g., during a holiday season) to ensure you have enough inventory or staffing to meet demand. This gives you the working capital you need without waiting for payments to trickle in.
  

4. Supplier Financing: Negotiate Better Payment Terms

Did you know you can negotiate financing directly with your suppliers? Supplier financing (or trade credit) allows you to extend your payment terms—essentially giving you more time to pay for inventory or supplies without a formal loan application process.

• Pro Tip: If you have strong relationships with your suppliers, ask for net-60 or net-90 payment terms. This allows you to sell your products and collect revenue before the bill is due, improving your cash flow without borrowing.
  

5. Energy-Efficient Financing Programs: Cut Costs by Going Green

If energy costs are one of your biggest operational expenses, consider energy-efficient financing programs. Many local governments and private lenders offer low-interest financing to help businesses upgrade to energy-efficient equipment, such as solar panels or HVAC systems, which can significantly reduce utility bills.

• Pro Tip: Programs like C-PACE (Commercial Property Assessed Clean Energy) allow businesses to finance energy-efficient improvements and repay them through property taxes over time. This reduces upfront costs and can drastically cut down energy bills in the long run.
  

The Secret to Managing Rising Costs: Plan Ahead

Managing rising operational costs isn’t just about putting out fires—it’s about being proactive. Here are some strategies to help you get ahead of the game:

• Diversify Your Financing Sources: Don’t rely on just one form of financing. Keep multiple options (like a line of credit, supplier financing, and an SBA loan) available so that you can adapt to changing financial needs.
  

• Leverage Financing Before You Need It: Don’t wait until cash flow is tight to apply for a loan. Lenders look more favorably on businesses that apply when their financials are still strong. You’ll secure better rates and terms by being proactive.
  

• Budget for Rising Costs: Use past data to anticipate future cost increases. Build these into your financial strategy so you’re not caught off guard by rising prices.
  

Need Help with Other Funding Solutions?

At Njord Capital Group, our priority is understanding your unique situation and recommending the best solutions for your business. Whether you’re exploring short-term, long-term, or other financing options to improve cash flow, our goal is to provide real, practical solutions to get you back on track. If you’d like to explore how these strategies can fit into your financial plan, don’t hesitate to reach out at info@njordcapitalgroup.com or visit us at www.njordcapitalgroup.com to explore our other financing products.