Cash flow is one of the most critical aspects of business, since it provides a glimpse into the financial health of your company. If you have more revenues coming in from customer payments than you do expenses you’re paying out each month, you have a positive cash flow, and that’s what all businesses aim for. If your business has some issues with trying to establish positive cash flow, here are some ways that you can improve your ratio of incoming to outgoing cash.
Business line of credit
One of the best ways of handling inadequate cash flow is by establishing a business line of credit, which you can access as needed to cover temporary gaps in cash flow. There are two types of lines of credit, one being secured and the other being unsecured. Businesses with excellent credit and a strong business history may qualify for an unsecured line of credit, but most businesses would have to put up some kind of collateral to obtain a line of credit.
Term loans are those which you would apply for from a lending institution like a bank. While term loans can be very helpful in improving cash flow and growing your business, it is often difficult to be approved for such a loan from a bank. It also usually takes a while for a term loan to be approved, and for the most part cash flow issues need to be handled with more urgency.
Alternative lending products
Since term loans are not generally a good fit for most cash flow issues, it is necessary to find alternative solutions which will put money in your hands quickly to resolve urgent issues. Alternative lenders have stepped into the picture over the last decade to provide some very real and helpful options in this area. Merchant cash advances, purchase order factoring, and accounts receivable factoring are just a few of the potential solutions which can overcome cash flow issues.
Improve your cash flow with Proactive Funding Solutions
If your business is experiencing some harmful gaps in cash flow, we may be able to help your fill in those gaps and keep operations running more smoothly. Contact us at Proactive Funding Solutions to explore ways that we might assist with your cash flow issues.