Cash Flow Loans – Fast Access To Business Funding
As the owner of a small business or medium sized enterprise (SME), having a strong flow of cash into your business can be the difference between make or break.
Most companies achieve steady cash flow through their business by having a healthy customer base that regularly purchases goods and services.
However, even the most established and profitable companies will struggle if anticipated sales or payments fail to materialise.
You can have the most robust credit control processes in place, but if some customers consistently pay late or renege on paying altogether, that can cause problems.
If the situation persists, you may struggle to pay your staff and suppliers or settle tax bills. Having a cash flow issue will also prevent you from expanding, taking new products to market, or acting on a lucrative opportunity.
If you find yourself in a predicament where you need a quick and painless injection of cash into your business, a Cash Flow Loan can help.
Why Is Cash Flow So Important?
The phrase ‘cash is king’ is often used to demonstrate the importance of having cash in your business. That’s because it not only shows how healthy your business is – it enables you to do more things, such as:
Companies or individuals interested in investing in your business will want to analyse your balance sheets to determine how sustainable your business is.
When you have cash in the bank you can keep ahead of the curve and improve your business.
Maintain A Great Reputation
Good cash flow equals a solid reputation which is essential in today’s competitive business environment. Your reputation for honouring financial agreements with staff, suppliers and customers is paramount to your success.
What Are Cash Flow Loans?
Cash flow finance in the form of a short-term unsecured loan, can offer financial relief while you’re waiting for money to come into the business from elsewhere.
Depending on the lender and the amount of time you need the money for, repayment terms can range between 30 days and 12 months or longer. Cash flow loans are quick and easy to set up and flexible to use.
So if you need money in a hurry, access to funds can be arranged within 24 hours.
As well as borrowing lump sum amounts, you can arrange a constant line of credit. This enables you to withdraw money when you need it and repay it as soon as other funds become available, meaning you’ll pay less interest.
To be eligible for a cash flow loan, your business needs to be registered in England or Wales and have a solid set of accounts proving your profitability. You’ll need to have been trading for three years and you’ll also need to own a home in England or Wales.
How Do I Find A Lender?
Cash flow loans are usually offered by specialist lenders that only deal directly with financial advisers.
Discussing your company’s need for a short term cash advance with an experienced business financial adviser will help you find the lender and loan that suits your business needs quickly.
What Is An Unsecured Loan?
Unsecured borrowing is different to asset based lending, where a property or piece of equipment you own acts as collateral to be sold if you cannot repay the loan. You may be asked to approach your family or business associate for their personal guarantee as a type of security if you are unable to repay the loan.
So an unsecured cash flow loan may be the preferred option if you run a small to medium sized (SME) business that cannot offer assets as collateral or a guarantor. The lender will rely on your credit score instead.
When would you need a cash flow loan?
There are a number of situations when a cash flow loan could help you. Here are some of them:
- open another branch to increase your reach and revenue
- invest in the research and development of new products or services
- launch a marketing campaign to promote your new products
- upgrade your IT systems to manage your growing customer base
- hire a consultant to deliver a project that will increase your profits
- train your staff so they can help you develop customer relationships
- launch an e-commerce website
- pay a large expense you didn’t anticipate
- cushion a quiet period if your business has seasonal peaks and troughs
Is a cash flow loan right for my business?
Before agreeing to a cash flow loan, make sure you read all the terms and conditions. It’s important to fully understand how much you will repay in the long run and what the penalties are if you make a late repayment.
What are the alternatives to cash flow loans?
There are alternatives to cash flow loans, such as bank loans, overdrafts, flexible business loans and credit cards. It’s worth exploring all these options before you make your choice.
How can Century Business Finance help?
As experienced business financial advisers, we specialise in cash flow loans for SME owners.
We are regulated by the Financial Conduct Authority (FCA), which means we are qualified to discuss your business funding needs with you and recommend appropriate regulated lenders.
We can help you in a number of ways:
- By working together we can help you choose the most appropriate funding solution for your business.
- We can help you decide how much you need to borrow and for how long.
- We’ll contact the lenders we know will be able to give you the fastest, most competitive loan options and interest rates available.
- We’ll explain the jargon – such as APR
- We’ll guide you through the terms and conditions so you know exactly how much you need to pay back and by when
- We’ll save you the time it would take you to research the market yourself
- And we’ll help you choose the cash flow loan that will give you the best value for money and flexibility.
All you need to do is speak to one of our friendly financial experts now.
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 firm has insufficient cash flow, it can secure a business 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.
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