It is very common for us to hear a person or business owner to search for ways to access finance that is enough to solve some credit concerns or to help a business operation to grow. 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.
One source of finance, that usually companies may not know that they actually have in their keeping, are cash reserves. By allowing your company make some self-financed growth plans, cash can actually be revealed and fused into the system, and this can be accomplished by taking a closer look at credit procedures, how terms of credit are granted and how payments that are outstanding can be chased.
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.
By maximizing the terms given by your creditors, you will be able to manage you’re your working capital, which is not only about better control of debtors and stock. 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. Business owners could resort to drawing on cash savings, the use of personal credit cards, or taking new mortgages using residential properties, are instant solutions to a company’s finance problems.
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 case the asset financiers will help you preserve your cash by financing the purchase of assets needed by your company like machineries, vehicles and other equipment, and the financier is looking at these assets as their own security. 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.