In business, cash is king but finance can help

Any business owner will tell the most challenging aspect of their business is being able to generate the cash flow to keep the doors open, pay the bills, recruit and pay staff and to grow.

The well-known phrase such as “Cash is King” refers to the business being financially healthy.

A lack of cashflow will not only stifle the health of a business but it will also test the energy levels and confidence of the business owner.

So many businesses have found a niche. They have identified an opportunity, a client base and things are tracking along nicely. However, how do they mitigate the risks of something going wrong?

What options are available if the coffee machine breaks down, a car or truck is off the road for a period of time or in a positive sense if you receive a big order but unable to commit because of the terms of trade of the supplier and or client.

As with home loans there has been some significant development over the past 10 years in relation to business finance and the opportunities available.

Let’s have a quick look at what’s available.

Equipment Finance – the ability to lease, hire purchase equipment such as motor vehicles, tractors, machinery has been around for many years. However, you would be surprised how far the equipment finance extends to these days.

Many business owners are looking to save money on their energy costs and looking for an energy efficient upgrade.

There are now leasing options available that include solar, lighting and even light bulbs that you can finance or rent over a couple of years on monthly payments that help preserve your cashflow.

Here are a few other examples of what you can obtain equipment finance; air conditioning units, office fit outs, digital point of sales equipment, laptops, audio visual equipment just to name a few.

So how can you obtain such finance; make contact with a professional finance or mortgage broker and they can help you with your application to companies like Moody Kiddell, Classic Funding, All Leasing, Eclipx.

Invoice Finance – invoice finance comes in many forms and can include debtor finance, invoice finance or trade finance.

It allows a business owner to receive a percentage of their outstanding invoices upfront so that they can manage their cashflow, continue to grow and not have to wait 30,60 or 90 days for their client to make the full payment.

Let’s say, you purchase your goods for say 50,000 and have sales to retail outlets totalling $120,000 with varying terms between 60 and 90 days. Having to wait for the retails outlets to pay their invoices may cause problems for your cash flow and limit your ability to fund the next order to maintain growth.

So how can you obtain such finance; make contact with a professional finance or mortgage broker and they can help you with your application to companies like Classic Funding Group, Scottish Pacific Benchmark, Bibby Finance, 180 Capital.

Business Finance can also include sale on lease back, operating leases, novated leases, agribusiness and any other type of commercial finance that can help your business grow.

Be sure to listen to the podcast with CEO of new non bank busienss lender Prospa, Beau Bertoli for more insights into business finance opportunities

The key to preserving your cashflow is to establish your options and to understand the tax implications and it is recommended you seek advice from your accountant before proceeding with any finance applications