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The Basics of Cash Flow Funding

All businesses suffer hard times at some point – but that doesn’t mean they’ve reached the end of the road. The costs of running a business are always increasing, and sales are unpredictable, which is often a disaster waiting to happen. Many businesses have seasonal trading issues and struggle to find cash at certain times of the year. Whatever the cause of cash flow woes, most SMEs have them.

Cash flow funding is a solution to the problem. There are various forms of finance which can help businesses better manage their cash flow and avoid the downward spiral into debt. Alternative finance providers offer direct solutions to help companies balance the books, without high interest loans. The right cash flow funding solution depends on the type of business and its finance needs. Here are the main types of funding available for cash flow purposes.

Merchant Cash Advance

This type of finance is perfect for any business which takes card payments – shops, pubs, salons, cafes, B&Bs, car dealers. It is a fast and short term finance option for businesses, allowing them to lend cash based on their monthly turnover from debit and credit cards. If you have been taking card payments for more than four months then you are usually eligible for an immediate cash advance of up to £500,000.

Invoice Finance

Another way of raising fast funds to improve cash flow is by invoice factoring. If you need the money for the service you’ve provided sooner rather than later, an invoice financier can pay up 90% of the invoice immediately. This allows businesses to free up capital that is locked away in unpaid invoices. It shortens the billing cycle and can help you keep on top of bills and staff costs, rather than having to wait 30-60 days for invoice payments.

Asset Finance

There are always finance solutions, even if you are operating at a loss or you don’t have security to put up against a loan. Asset finance is suitable for agricultural businesses, manufacturing companies or any other organisation which has expensive assets such as machinery or equipment. The funding is borrowed against business assets, from equipment to vehicles. You can also use asset finance to fund a new essential purchase, by leasing or hire purchase with flexible payments.

Getting a grip of cash flow can be really difficult, as you know what expenses you have but often money coming in is beyond your control. Don’t suffer in silence, get in contact with Genie Finance to discuss the range of cash flow funding options.