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. With several firms and people actively searching for different sources of finance, we are seeing nowadays different manners how we can access finance.
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 can also manage well your working capital by not only having better control of debtors and stocks, but also by maximizing your credit terms. 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.
Due to some reasons or another, business owners may find it difficult to be financed by these traditional means of funding, and so another way to fund growth in the company is to use personal resources. Instant solutions like drawing on cash savings, using of personal credit cards, or taking mortgages on residential properties, are helpful to fund growth.
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.