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.
It may be a surprise to some businesses that they actually have undiscovered cash reserves that they can use to finance the growth of their 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 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.
Asking for help from family and friends is considered a less stressful way of how you can raise some funds, but sometimes you will face of being asked of a higher interest rate, and you have to be careful in not ruining their trust and relationship if something go sour with your company and you cannot you’re your payment dues.
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.