Factor In Cash – Don’t Just Bank On It

CASH is king, so the saying goes. Without it, sales and potential orders could be lost because of a lack of funding. Cashflow is needed to allow firms to take on more work. That applies small and medium-sized businesses and organisations – those who have missed out on potential revenue because they haven’t got the cash to make it work.

Alternatives to bank funding have to be found, with invoice discounting and factoring seen as worthwhile options. Both will lend you money against your outstanding sales ledger.

Obtaining money can be challenging for companies even post recession. It is vital they try to secure the right type of deal, either by way of loan, or another source, to prevent missing out on further opportunities.

Make sure you shop around. If the bank doesn’t oblige, try other avenues such as private equity or one of the on-line business lending marketplaces.

Factoring has the added benefit of chasing and receiving payment. Releasing cash tied up in your sales ledger provides essential cash-flow for your business. As soon as the invoice is raised you are advanced funds against it, up to 95% of the invoice value. So, don’t let income slip through your fingers. The banks might be saying no. As far as taking on orders, your business doesn’t have to.



3 Comments

  • Neil C

    Good advice on how to make the cashflow work which is never an easy thing in business.
    You can have the fattest order book in town but without the cash to make it work you are dead as a business.

  • Boris Cahn

    There are many way to make a business work although I agree, cashflow is fundamental.
    Better to have a good relationship with your bank manager than to seek funding elsewhere.

  • Nova Business

    I also think that factoring is a great financing solution for small business owners. I think that business can really take more project and work when they have enough cash. Thanks for sharing this article.

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