Among the most crucial aspects of business success is strong cash flow. However, many small businesses experience fluctuations in revenue throughout the year. It is imperative that these companies find ways to manage their cash flow so that they can thrive and prosper in the long term. Here are some financing tips to help you achieve steady cash flow.
Obtain a Business Line of Credit
Business lines of credit allow you access to funds that you can draw on in times of need. Unlike a loan, which you receive in a lump sum, lines of credit allow you to borrow the specific amount you need, and you only pay interest on the amount that you borrow. After you have paid off the debt, the funds are available to you again when you need them.
Acquire a Short Term Loan
Short term loans are usually for smaller amounts, and interest rates are high. However, these loans can see you through seasonal drops in income, unplanned expenses, and sudden crises.
Use a Credit Card
Business credit cards are useful when you need to purchase inventory, upgrade equipment, or handle an unexpected emergency. When you use them, you often obtain perks such as points, miles, or cash. Before you apply for a business credit card to assist your cash flow, conduct research into fees, interest rates, and rewards.
Finance Your Invoices
Although invoice financing is often confused with invoice factoring, they are two distinct methods of acquiring funds to boost your cash flow. Invoice factoring involves the sale of unpaid invoices to a factoring company. On the other hand, invoice financing allows you to borrow money from a lender based on your unpaid invoices.
Get a Cash Advance
A cash advance is a special type of short-term loan that you obtain from a lender. They are attractive because the application process, approval, and receipt of funds are all quick. However, they generally come with high fees and interest rates.
For more advice on managing cash flow, contact KASHER Capital.