The small business community has already embraced American Express' line of OPEN Business Cards as a financial tool. Now, a new partnership between the credit card issuer and Intuit helps shop owners, restaurateurs, and countless other small business owners smooth out cash flow wrinkles at a low cost and with just a few clicks.
[More funding options: How SmartBiz Helps Small Businesses Secure Funding]
This month, the companies unveiled that American Express’ short-term online lending solution, Working Capital Terms, will be integrated in QuickBooks online. Launched in July, Working Capital Terms offers entrepreneurs "access to the capital that they need to grow," Brett Sussman, vice president of Working Capital Products at American Express Global Commercial Payments, told Small Business Computing.
Keep Small Business Cash Flowing
If small business owners want to attain that growth, it's critical that they keep their cash flow, well, flowing. By American Express' estimates, approximately one third of small business owners had a "cash-flow crunch in the last quarter," Sussman said.
Fortunately, small business owners are nothing if not resilient. A mad scramble to find money and cut expenses, plus the couple of sleepless nights that typically ensue, can sometimes solve a cash flow problem. But not all entrepreneurs fare as well; delayed financing or funding that comes up short is one of the top reasons businesses fail, according to the Small Business Administration.
Cash flow mishaps are "often a mistiming of your money-in or your money-out," explained Sussman. As apparent as the solutions seem—keeping a closer eye on one's finances and planning accordingly—the marketplace isn't always cooperative.
Seasonal businesses, for example, often have to contend with factors that are beyond their control but, nonetheless, have a big effect on the demand for their products and services. A rain-soaked summer, delayed winter weather, or a natural disaster can cause wild swings in attendance or in the price and availability of certain products from suppliers.
That variability aside, once in a while small businesses hit pay dirt; an innovation or new twist on an old favorite becomes a best seller. To capitalize on the opportunity, they need to ramp up production and order up more raw materials. If their credit lines are maxed out and bank balances are a light, good luck meeting demand.
With Working Capital Terms, American Express offers small business owners a new way of ensuring that they have access to funds when they most need it.
American Express Financing in QuickBooks Online
Like many other QuickBooks Online apps, American Express Working Capital Terms integrates seamlessly with the cloud accounting software's interface and workflows. "The intention is to combine short-term financing with automation," Sussman said. By embedding the solution into QuickBooks Online, American Express' financing options appear and are "contextually relevant when you're thinking about it."
Signing up is a snap, and it involves a "one-page application that's almost entirely prefilled because we know you as an existing card member," Sussman said. Once activated, Working Capital Terms offers the Amex financing option for vendor bills of at least $1,000 (bills that are not past due).
After clicking on the option, you select 30-, 60- or 90-day repayment terms. Interest rates are 0.5 percent, 1 percent, and 1.5 percent, respectively. Loan approvals are nearly instant, after which American Express directly pays suppliers and vendors on behalf of the business owners.
Loans are available for amounts between $1,000 and $750,000. Loan amounts, plus interest, are auto-debited from a business account after the 30-, 60- or 90-day deadline.
Better yet, small business owners can access American Express financing without interrupting their own workflows, said Sussman. "You should never feel that you leave the QuickBooks Online ecosystem." Account reconciliation is automatic, further streamlining the process for small business owners.
"We're thrilled to partner with American Express to give QuickBooks Online customers who are also American Express OPEN Card Members access to affordable loans to pay off bills and make purchases with a few clicks and approval in as little as sixty seconds right from QuickBooks Online," said Karen Peacock, senior vice president of small business at Intuit, in prepared remarks. "We believe this is a game changer in support of small businesses—providing financing to bridge the gap between money in and out, and ultimately helping to grow their business."
American Express Working Capital Terms with QuickBooks Online will be available to select customers in early 2017.
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Pedro Hernandez is a contributing editor at Small Business Computing. Follow him on Twitter @ecoINSITE.
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