When your business is growing fast, cash flow can become just as important as sales. A surge in demand often means you need to restock inventory, hire staff, or expand operations quickly.
But if the marketplace where you sell takes weeks to pay, your cash may be tied up just when you need it most. That’s where financing comes in.
We often get asked about Daily Advance v. a line of credit – so here’s a point by point comparison.
Line of Credit
A line of credit works like a flexible loan. Your lender approves you for a maximum limit, and you can draw funds whenever you need them. You only pay interest on what you borrow, not the entire limit.
Benefits:
- Flexible: Use it for inventory, payroll, marketing, or unexpected expenses.
- Cost-effective: Usually low cost.
- Control: You decide when and how to borrow.
Challenges:
- Approval depends on your business and personal credit.
- The credit limit may not automatically grow with your sales.
- Requires manual drawdown.
- May include maintenance or unused fees.
Best for: Established businesses with good credit that want a flexible, low-cost option to smooth out cash flow.
Daily Advance
Daily Advance turns your sales into immediate cash. Instead of waiting weeks for your marketplace to pay out, you get paid as soon as you sell: Storfund will advance you 80% of the value of your sales the day after you ship. When your marketplace pays out, you get the remaining 20% minus a fee.
Benefits:
- Fast: Funds arrive almost immediately after you sell.
- Automated: No need for manual drawdowns, funds arrive automatically.
- Scalable: As your sales grow, your financing grows too.
- Easy approval: Because Storfund has an API connection with your marketplace, checking your sales history is easy.
Challenges:
- The amount you receive is tied to your sales.
Best for: Rapidly growing businesses with long payment terms – particularly those who have already outgrown their line of credit.
Which is better for fast growth?
If your business is growing steadily but not overwhelming your current financing, a line of credit can be the right choice.
However, if growth is accelerating quickly and cash is constantly tied up, Storfund can provide the scalability you need. The more you sell, the more financing becomes available.
Think of it this way:
- A line of credit is like a bucket of money. Great if it’s big enough, but it can run dry if growth outpaces your limit.
- Factoring is like a tap connected to your invoices. The faster your sales flow, the more cash you get.
The bottom line
For fast-growing businesses, waiting even two weeks for customer payments can create a cash crunch. If you have access to a large enough line of credit, it may be able to bridge the gap. But if you need financing that scales automatically with your growth, Daily Advance from Storfund may better suit your needs.
English (UK) 
Deutsch 
Italiano 
Español 
Français 
English