Any small to medium business enterprise knows there will be tough times. This awareness that the most profitable periods will inevitably be met with times when revenue lulls will pose sober questions to even the most ambitious entrepreneur.
But if an enterprise can deal effectively with cash flow problems in good times, they can have confidence to face the threats posed in tough times. And there is no better way to effectively deal with cash flow than by following these expert strategies.
Cash flow solutions
Consultation with firms like Close Invoice Finance can greatly assist businesses to improve their cash flow. Cash flow is vital not just to maintain the daily running of an SME, but it also as the portent of growth. These firms can provide adequate assessment and offer a variety of solutions not on offer at big banks for SMEs keen to maintain solid cash flow, then use it to invest in potential growth to shore up in difficult periods.
Invoice discounting
One of the key strategies that firms like Close Invoice Finance can expertly provide is the discounting of receivables. Many SMEs find their cash flow crippled when the multitude of receivables they charge to companies become backlogged or delayed and the expected revenue does not flow in a manner to support investment. These firms will lend against the receivables so you can receive up to 90 percent of what is owing to you within 24 hours of issue.
Factoring
In a similar fashion, factoring addresses the issue of delayed receivables. Often confused with discounting, factoring does not involve a loan or line of credit so much as it construes firms like Close Invoice Finance buying the receivables and taking responsibility for their payment. For an honest fee they thereby provide SMEs a proven solution to the cloud of papers and unpaid notices that can clog up a business.
Asset based lending
One of the main reasons SMEs can be crippled by late payments is they lack the line of credit from banks to invest while they are waiting for payments to be paid. Expert consultants and companies such as Close Invoice Finance help SMEs avoid this issue by making careful analysis of a company’s finances, and providing accurate, fair and useful lending based on the assets the company has in their name.
Debt protection
More often than not, an SME will prefer not to take on a hefty interest rate or large chunk of credit from a bank when they are trying to maintain investment and cash flow. The same firms that offer these expert strategies can also provide detailed advice on how to protect against bad debt, thus enabling your company to not only beat the problems of delayed income and payment, but also have the confidence to know they are strong in assets and low in debt.
Mark Tull Money 