Sooner or later, there’s a chance that your cash flow forecasting will highlight a shortfall in funding. The good news is that the time you have invested in preparing your forecast has allowed you to identify this issue in advance of it happening. You should have time to choose the right finance options to remedy the situation. Here’s part two of our five part series on managing your cash flow.
There are a range of finance options available to you, and the secret to their success is your ability to match the right option to your business needs. Once you have chosen your preferred option you can do the paperwork in advance, without having to look for an urgent turnaround. Lenders don’t like desperation, so you will probably find you have more options to explore when you don’t need cash on the same day.
Here are a few finance options that you could explore:
1. Extending your supplier’s payment terms
Before you explore further finance options, it can be a good idea to check out whether your suppliers are able to extend their payment terms. This would provide your business with the equivalent of a free loan and might be possible if you have a good relationship with your supplier.
2. Advanced line of credit from your bank
This is a credit facility that you can access as and when you need it, up to a set limit.
3. Review your existing customer position
Do you have any invoices that you could ask your best customers to pay sooner, or is invoice factoring an option? Invoice finance will allow you to immediately access money that you have already earned but are waiting to receive in payment. Take the opportunity to chase up any late and outstanding payments.
4. Alternative finance options such as short term business loans and invoice finance or factoring
Short term products are designed to boost cash flow, and if you choose the right one you will only need to pay for the time that you need it, and will be able to switch it off when you don’t. Alternative finance presents a great option if your bank is unable to offer further credit or you want to avoid real estate security.
Remember that when you are looking for a finance solution, it’s not just about the product – it’s also about the provider. Finding a financial services company that can support your needs as a business while offering the right product to support your cash flow is key. Don’t settle for second best.
Your Fifo Capital Business Partner can work with you 1:1 to identify the right solution to meet your needs and support the future of your business. It’s about taking the time to understand your business and listen to you. That’s what we do best. Then we use our smart finance products to build a solution that will support your long term growth and business goals.
Invoice Finance, Cashflow Solutions and Business Loans
Fifo Capital are experts in cashflow solutions for small to medium business. Find out more about invoice finance and our fast business loans here: