Sometimes, as a business grows, changes gear or is faced with seasonality issues, there can be a need to raise cash to help the business to get through until the next period. Generally when a business approaches me to assist under these circumstances I will usually suggest to them at least one or all of these options:
1/ Upgrade an existing truck or vehicle that you have equity within
That way when you sell or trade your truck or vehicle you will receive any equity back in cash whilst maintaining similar repayments on the new purchase. Also, if you are registered for GST and finance the new truck or vehicle as a chattel mortgage you will also receive a GST credit on the new purchase.
This options works particularly well towards the end of an existing finance contract or when an asset is in its strongest equity position.
2/ Take out a short term cash flow loan
This option is generally available to established businesses and the money lent (along with the rate) will be determined based on your business history, why you need the cash and ultimately your current financial position which is assessed by reviewing your most recent bank statements.
We are skilled at helping businesses to obtain the best possible cash flow funding solution quickly and easily so if this is an option you are interested in considering I’d be happy to chat with you.
3/ Negotiate better supplier payment terms
What expenses like material or fuel do you have with other businesses?
Will any of your suppliers allow you to have a 30day account?
They may require you to apply for a trade account through a credit application process but doing this may just give you the extra time you need before you get paid.
4/ Opt to pay your insurance premiums over time
Insurance premium funding enables you to pay your annual insurance premiums (such as General and Workers Compensation) in easy to manage monthly instalments rather than one annual lump sum which allows your working capital to stay in your business.
Basically, how it works, is that the once approved, the lender, will pay your annual insurance premiums to the provider on your behalf and all you need to do is pay the lender in monthly instalments.
When processed by us, the application process can also be quick and easy.
If your interested in learning more I’d be happy to chat with you.
5/ For stock intensive businesses, consider debtor funding
This method of funding gives businesses the ability to get advances on invoices or receivables and can be particularly useful for growing businesses or for businesses with drawn out payment terms.
6/ Apply for a Bank Overdraft
Can be a flexible form of funding and may be a secured or unsecured facility depending on the strength of your business. The amount lent will depend on your bank.
7/ Use a Credit Card
Better for amounts under $10K and can often be organised through your bank or online. Beware of the high interest rates.
Knowing these options are available, can really help you to navigate a cash shortage easily. If you find your business in this situation or believe it may be in the future and would like to chat about all or any of these options you’re welcome to contact me online or give me a call on 0431 177 605.