Looking for a Cash Flow Loan?
When a business is struggling to pay a bill or to make an essential purchase, it typically has a cash flow problem. In this instance, cash flow loans can be useful for plugging the finance gap. But what exactly is a cash flow loan and what sort of business applies for one? Let’s take a closer look.
The need for financing
There are so many instances in which a business needs financing. Even the most experienced entrepreneurs and business leaders will find that cash flow can be a problem. It’s also a fallacy that cash flow problems only affect smaller or newer businesses because the most time-served and asset rich firms can still experience these issues.
Why is cash flow so important?
A going concern
Cash flow keeps a business ticking over. Even a profitable business cannot stay in operation if it struggles with cash flow.
To secure finance
Cash flow allows businesses to secure finance when they need it. If a business has insufficient cash flow, it can secure a loan against its assets. This can then continue to flourish by using that cash flow to operate successfully. A good way to improve business cash flow is by using a business cash flow credit facility and then managing it carefully.
To attract investors
Operating cash flow is one of the key measures that investors look at in evaluating any business. Investors will look at net income and revenue too, using the three measures to identify how well a business is able to sustain revenue and to grow in the future. Remember that even a highly profitable business can fail if its cash flow is insufficient.
To manage the business proactively
When a business has cash in the bank it has opportunities to move ahead. For example, it may want to buy in external expertise, to invest in R&D, to launch a marketing campaign, to upgrade its software, to train staff and so forth. By having that essential cash, the business can move quickly to capitalise on such opportunities.
Good cash flow can support a healthy business If a business can keep a healthy cash flow, it can plan ahead for its future expenses and income and then flag up any possible problems. This forward-thinking helps to maximise profitability by allowing business leaders to put longer-term plans in place.
Good cash flow maintains a great reputation A business with healthy cash flow can pay its suppliers on time, pay staff on time and meet its financial obligations. This helps it to maintain a positive reputation which is essential in today’s challenging business environment.
What are the features of a cash flow loan?
Cash flow loans are designed to provide a working sum of money that allows the business to continue its operation without delay or issue. The loan is typically quick to turnaround and will not be for a huge sum. It is likely to have a short loan term or duration, meaning that it will be repaid quickly. In this way, the interest rate applied to the loan is likely to be competitive. Some businesses will use these types of loan as an alternative to a credit facility or overdraft and the loans offered will have flexible features that enable this.
What are the benefits of cash flow loans?
Cash flow loans will have a variable selection of features depending on the lender and the terms. When we offer a cash flow loan, it has these benefits:
- It is meant to be a short-term loan that will be repaid quickly, so there will not be an onerous amount of interest applied. This makes it an affordable loan product.
- It will be offered quickly and the funds can be transferred into the business bank account immediately upon acceptance.
- It can be managed online – from the initial application form through to the ongoing account management, payment and balance viewing.
- It doesn’t require meetings between the lender and borrower (at least in our case!) Many traditional lenders will still expect to have face-to-face meetings before approving any kind of work.
- It doesn’t require a lot of paperwork or supporting evidence to apply for.
- It can be offered with flexible features that meet each business’s unique needs.
Find out more
Our team of finance advisers are on hand to help you access the funds that you need to maintain a healthy cash flow. With years of experience and many happy customers, we are pleased to offer a wide range of business loans of different types, to suit each need. We are also proud to offer loans to 9 out of 10 of the business customers that apply to us for finance, having been turned away from traditional lenders. Please get in touch to find out more or complete the online application form for an instant decision
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