Whatever goals you may have for your business, it all comes down to cash flow. A typical cash flow statement contains three sections: cash flow from operating activities, cash flow from investing activities and cash flow from financing activities. Even when cash flow is tight, you can still boost your capital through affordable funding and smart business decisions.
The importance of cash flow
If you ask a thousand business owners what their number one challenge is, the majority will say cash flow. It can be difficult trying to meet your financial commitments and implement new strategies to grow your business.
As we near a new financial year, you might investigate what areas of your business you want to grow, and how you can make that happen. If you’re having issues with your cash flow, there are ways to change that so that you can grow your business and minimise your tax debt from the ATO.
Three ways to improve your cash flow from financing
Invoice financing, also known as debtor finance, is essentially a line of credit secured by your accounts receivable (unpaid invoices). Many people are drawn to invoice financing because it has a quick turnover, no reliance on property as collateral and allows you to capitalise on potential growth opportunities. If unforeseen circumstances such as slow-paying customers, rising fuel prices, increasing costs and competition from overseas suppliers or a decrease in property prices are affecting your business operations, invoice financing may be for you.
Apart from invoice financing, if you need funds to keep the momentum of your business going, you can explore flexible business loans of up to $500,000 or flexible lines of credit of up to $150,000.
Small business loans
Small business loans can help with product developments, purchasing tools, upgrading equipment or machinery, renovations, or fit-outs, creating marketing campaigns, building websites and more.
Some benefits include:
- Lump sum of $5,000 to $500,000
- Terms from three to 36 months
- Cash flow friendly repayments
- No asset security is required up front to access up to $150,000.
- Minimal documentation requirement for funds under $250,000, and
- 4 weeks no repayments as a standard option (interest will accrue from the settlement date to the end of the term).
Business line of credit
Business line of credit can be used to manage cash flow gaps, pay staff wages, cover unpaid invoices, buy urgent stock, manage seasonal fluctuations, pay suppliers, manage late-paying customers and more.
Some benefits include:
- Facility limits of up to $150,000
- Use and reuse as often as you like
- Only pay interest on what you use while you use it, and
- 24 months renewable term.
After using these financing activities to boost your cash flow, you are then able to repurchase stock or purchase assets that put your business in a healthy position to grow.
Unsure if your industry qualifies for these loans?
It can be confusing knowing what types of loans your business qualifies for, which is why working with a finance expert should be your first step. A finance broker can help with calculating your working capital, creating a cash flow plan and loan applications. If you’re looking for fast cash to grow your business or help improve your cash flow, engage with our Finance & Lending team today.