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. Because of the demand of people and businesses looking for new means of finance sources, we are now hearing various ways of how we can get hold of finance.
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. These undiscovered cash reserves can be found by taking a close review on how a company handles credit procedures, how credit terms are granted and how to approach outstanding payments, and this is described as a self-financed growth plans.
By taking a good look at your inventory management process and see where the cash of the company is trapped, you will find another source of finance, and you can do this by making sure that your stock is kept at an optimum level.
You may not know it by having good management of working capital is not only about better control of stocks and debtors but also looking into maximizing the terms offered by your creditors. You cash position can have a positive impact if you can take full advantage of the payment terms that your suppliers may be willing to give, like 35 to 45 days instead of paying before the due date.
Another means to fund growth, especially with the traditional ways of getting finance are becoming difficult for one reason or another, a business owner can use personal resources to help financial concerns of the company. 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.
Considered as a less stressful way of raising finance for your needs is to go to your friends and family, although in this case you may have to be ready to pay a higher interest rate.
The next way to get that finance needs is asset finance where invoice discounting, factoring and funding of asset purchases are the sources. In this case the asset financiers will help you preserve your cash by financing the purchase of assets needed by your company like machineries, vehicles and other equipment, and the financier is looking at these assets as their own security. This type of source of finance will help up speed the flow of cash into your organization since cash can be accessed fast found in the log book of debtors.