Establishing a new business is a challenge in itself, but what are the options when a newbie small business starts experiencing a cash flow crisis? In this article we ask Mhairi MacLeod, Managing Director, Astute Connexion to explain the benefits small business owners are gaining by using the financing option of Cash Flow Funding.

A lot of business owners think of Cash Flow Funding as a last resort to ‘get out of trouble’. However, Cash Flow Funding can be an extremely valuable financing tool when it comes to wanting to expand and grow your business.

It’s not just about knowing how to manage your business or cash flow, but knowing how to utilise Cash Flow Funding as a tool to successfully run your business.

Generally, most businesses who sell their goods or services have terms of up to 30 days to secure orders from customers. Unfortunately, some of these invoices could take up to 60 days or more to be paid. This has a potential to reduce the business’s cash flow, and can limit the growth of the business.

The downtime in which it takes customers to pay these invoices can be one of the biggest challenges faced by business owners, especially when they have to pay their own suppliers, staff wages and most importantly reinvest in their own business.

What is Cash Flow Funding?

Cash Flow Funding is a product that provides a business with quick access to funds:

  • Amounts from $5,000 to $250,000
  • Terms of 3-12 months
  • No assets security required, just directors’ guarantees
  • Cash flow friendly repayments
  • No penalty for early repayment.

All you need is:

For your small business to be ABN registered and trading for a minimum 6 months. The business owner will need to be in the position to provide 3 months of business banking statements.

What can Cash Flow Funding be used for?

  • Purchasing tools and equipment
  • Business expenses
  • Paying supplier debt
  • Updating existing premises or moving to new premises
  • Marketing and new signage etc.
  • Updating the business’s technology
  • Recruitment and hiring new staff.

The opportunities using Cash Flow Funding in your business are endless. Cash Flow Funding is a beneficial product that can be used for, any number of purposes and is available across all different industries.

Below are some Cash Flow Funding success stories.

Scenario 1
Mainstream lending couldn’t help Tim pay his business and personal tax bills, but after discussing the situation with his finance broker, unsecured Cash Flow Funding was approved for $125,000 to pay the ATO and clear outstanding debt with minimal fuss.

Scenario 2
A small design company was unable to run more than one job at a time due to the gap between purchasing equipment and invoices being paid. By sourcing Cash Flow Funding, they were able to develop and grow their business. The firm no longer have the need to run an overdraft.

Scenario 3
A Hairdressing salon needed to secure funds to purchase inventory and stock as they were forecasting a higher number of clients over the Christmas period. They successfully secured Cash Flow Funding allowing them to make purchases and pay in full. They received a discount from the supplier which in turn, increased their revenue and grew their business.

Scenario 4
A local fashion boutique was looking at expanding their business, but they didn’t want to use their existing cash reserves to fund the expansion. They approached their finance broker to explore and discuss the different avenues available to them. The business owner decided that Cash Flow Funding was the best option for them. They loved the fact that they could pay the loan back sooner, with no penalties for paying out early.

Scenario 5
A café owner needed funds to finance the renovation and fit out of their existing premises, which included the purchase of new equipment. They decided that Cash Flow Funding was the ideal product for them as they didn’t need to have security to obtain the loan. They also liked the cash flow friendly repayments that were available to them.With tax time fast approaching, as a small business owner, you can claim deductions on business assets up to $20,000. So, if your business’s current cash flow cannot support an asset purchase, Cash Flow Funding could be the answer.

Interested in discussing finance options to grow your small business? If your business has been trading for more than 6 months Cash Flow Funding could provided the perfect solution. To discuss the financing needs of your small business with one of our small business finance brokers call our office a call on 1300 888 299.

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Finance Tips, Self Employed Finance, Small Business Loans The Easy Fix For Cash Strapped Small Business Owners