We commonly hear a business owner or an individual who is trying to get some ways and means to help a business grow or to help in one’s credit condition. The fact that many are now actively seeking for alternative sources of finance, we can now witness changes on how people can access their funds.
It may be a surprise to some businesses that they actually have undiscovered cash reserves that they can use to finance the growth of their company. Know that you can unlock your cash and release it back to your operation by allowing your company undergo a self-finance growth plans, and this can be done by reviewing closely at some credit procedures, how the terms of credit are granted, and how to chase outstanding payments.
Through better inventory management by ensuring that stock is kept at an optimum level, you will be able to avoid cash entrapment and use cash in supporting and financing growth of the company.
You may not know it by having good management of working capital is not only about better control of stocks and debtors but also looking into maximizing the terms offered by your creditors. You cash position can have a positive impact if you can take full advantage of the payment terms that your suppliers may be willing to give, like 35 to 45 days instead of paying before the due date.
If the traditional avenues of getting funds is becoming difficult to a certain company, personal resources of the owners can be used to fund growth. There are immediate actions that can be done to help funds inflow into your company, such as taking on mortgages on your residential properties, drawing on your cash savings, or using your personal credit cards.
Considered as a less stressful way of raising finance for your needs is to go to your friends and family, although in this case you may have to be ready to pay a higher interest rate.
The next way to get that finance needs is asset finance where invoice discounting, factoring and funding of asset purchases are the sources. In this mode of finance, you will have an asset financier who will buy the machinery, equipment or vehicle needed for your company’s operation, and these bought assets are at the same their security, thus you do not have to provide additional collateral plus you get to keep your cash and use it for funding the growth of your company. With a faster flow of cash inside the business, and this is being done by accessing cash that are tied up in the debtors’ books, there will be available cash to finance needs of the company.