It is very common for us to hear a person or business owner to search for ways to access finance that is enough to solve some credit concerns or to help a business operation to grow. With several firms and people actively searching for different sources of finance, we are seeing nowadays different manners how we can access finance.
One source of finance, that usually companies may not know that they actually have in their keeping, are cash reserves. 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 can also manage well your working capital by not only having better control of debtors and stocks, but also by maximizing your credit terms. You can review at your payment terms to your suppliers, like extending terms to 35 or 45 days to take full advantage of your cash position.
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.
Gaining now in popularity as a source of finance is asset finance where invoice discounting, factoring and asset purchases are the sources or involved. In this mode of finance, you will have an asset financier who will buy the machinery, equipment or vehicle needed for your company’s operation, and these bought assets are at the same their security, thus you do not have to provide additional collateral plus you get to keep your cash and use it for funding the growth of 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.