Why the region sits where it does
Wikipedia describes the Inland Empire as the metropolitan area inland from coastal Southern California, centered on Riverside and San Bernardino and covering both counties. It says inexpensive land compared with Los Angeles and Orange counties, a large supply of vacant land and a network where many highways and railroads intersect made it a major shipping hub. Distribution centers there act as part of the system that moves goods from the ports of Los Angeles and Long Beach to destinations such as Las Vegas, Phoenix and Denver, and the article states that more than 80 percent of the state's imported cargo moves through the Los Angeles/Inland Empire Corridor.
For a small business, that means the big facilities are only part of the picture. Around every large distribution center there are smaller operators: pallet and packaging suppliers, forklift and equipment service, staffing agencies, repair shops, cold storage and fulfillment firms, local carriers and cleaning and security services.
The cash cycle of a small logistics operator
| Business | What it pays first | What it waits on |
|---|---|---|
| Fulfillment or 3PL provider | Warehouse rent, labor, racking, software | Client invoices, often billed after the work |
| Packaging and pallet supplier | Raw material and delivery | Customer payment terms |
| Equipment repair or leasing | Parts and technicians | Invoice approval after the job |
| Staffing agency | Weekly worker payroll | Client payment on its own cycle |
| Local delivery carrier | Drivers, fuel, insurance, maintenance | Shipper payment after delivery |
In nearly every row the cost is weekly and the income is monthly. That difference is where a small operator's cash disappears.
The risk that comes with a hub economy
The article is candid that the region is exposed to economic downturns. It notes that during the global downturn of 2008 to 2009 industrial vacancies in the region doubled, and it describes how an earlier local downturn followed the end of the Cold War, after which warehousing, shipping, logistics and retail helped the region recover. For an operator, the lesson is practical rather than historical: when volume slows, a fixed lease and a payroll do not shrink at the same speed.
That is a reason to keep a cash buffer sized to your fixed costs, and to pay attention to concentration. A small business that depends on one large client carries that client's payment habits and volume swings as its own.
Planning questions worth answering before you borrow against a contract
- If your biggest client pays 15 days later than usual, which bills do you miss first?
- What is the weekly cost of your payroll, and how many weeks of it do you hold in cash?
- If a forklift, truck or racking system fails today, where does the replacement money come from?
- Is the opportunity in front of you a new contract that needs staff and space before it pays, and how long is the gap?
Where working capital fits
Working capital suits an operator who has landed a contract and needs space, staff or equipment before the first payment, who needs to replace failed equipment, or who needs to bridge slow-paying invoices. It does not suit a business whose revenue does not cover its basic costs. We look at about three months of business bank statements and do not require tax returns. The credit pull is soft, and a FICO of 500 or above is considered. Sole proprietors can apply, including owner-operators who run their own small shop or service. This page describes cash mechanics, not a statement that any specific operation will qualify.
The application takes about five minutes. You will need roughly three months of business bank statements; no tax returns are required, the credit check is a soft pull, and a FICO of 500 or above is considered. Funding runs from $25,000 to $5,000,000 and can arrive in as little as 24 hours once everything is in. Start at the application page.