We commonly hear a business owner or an individual who is trying to get some ways and means to help a business grow or to help in one’s credit condition. The fact that many are now actively seeking for alternative sources of finance, we can now witness changes on how people can access their funds.
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. By allowing your company make some self-financed growth plans, cash can actually be revealed and fused into the system, and this can be accomplished by taking a closer look at credit procedures, how terms of credit are granted and how payments that are outstanding can be chased.
Another way to improve internal finance is through better inventory management by keeping stock at an optimum level, so as to minimize trapping of cash and use out some to support and finance growth of the company.
By maximizing the terms given by your creditors, you will be able to manage you’re your working capital, which is not only about better control of debtors and stock. By being not too eager to pay like well before the due date of your payables, you can further give a positive impact of your cash position by taking or asking your suppliers of a 35 or 45 days extensive terms.
If the traditional avenues of getting funds is becoming difficult to a certain company, personal resources of the owners can be used to fund growth. Business owners could resort to drawing on cash savings, the use of personal credit cards, or taking new mortgages using residential properties, are instant solutions to a company’s finance problems.
Another easy way to raise finance is to take loans from your family and friends, which may be less stressful but consequences have to be faced like higher interest rate and sometimes risking trust and relationship if something will go wrong.
There is also a called asset finance where the sources are invoice discounting, factoring and funding of asset purchases. In this situation, the asset financier will finance the purchase of vehicles, machinery and equipment needed by a company, and since these assets bought becomes a security, you do not need additional collateral, and thus help preserve your cash for other purpose of funding growth into your company. The means of speeding up cash flow within the business, and this is done by allowing a faster access to the cash that are tied up in the debtor book, will help obtain the cash that are needed to finance growth in the organization.