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. The fact that many are now actively seeking for alternative sources of finance, we can now witness changes on how people can access their funds.
Companies may not have discovered that they have on hand some cash reserves, and this is one source that can finance growth of a 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. By being not too eager to pay like well before the due date of your payables, you can further give a positive impact of your cash position by taking or asking your suppliers of a 35 or 45 days extensive terms.
If the traditional avenues of getting funds is becoming difficult to a certain company, personal resources of the owners can be used to fund growth. Instant solutions like drawing on cash savings, using of personal credit cards, or taking mortgages on residential properties, are helpful to fund growth.
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 situation, the asset financier will finance the purchase of vehicles, machinery and equipment needed by a company, and since these assets bought becomes a security, you do not need additional collateral, and thus help preserve your cash for other purpose of funding growth into your company. With a faster flow of cash inside the business, and this is being done by accessing cash that are tied up in the debtors’ books, there will be available cash to finance needs of the company.