There are many loan providers that can help small businesses with their capital requirements. One of the most highly rated companies that currently offers services to clients in the Asia-Pacific region is GetCapital. This lending company offers multiple business loans including vehicle and equipment financing, lines of credit with trade financing, and flexible business loans. With some 90% positive reviews from 50 reviewers, this alternative financing option is quickly finding a niche market with clients in the region. In 2016, GetCapital won significant praise as the second fosters growing company in Australia by SmartCompany.
Why is Cash Flow So Important for Businesses and What Can GetCapital Do to Help?
There is one thing that greases the wheels of a business more than anything else: cash flow. Cash flow is needed to maintain daily operations, by providing businesses with the means to pay for things, and to keep your company’s operations liquid. Take a moment to consider your checking account. At any given time, the balance on that account is likely to fluctuate to the downside. It’s only your income – your salary, wages or payments received that top up the checking account balance.
Everything else is likely an expense. In much the same way, your small and medium business (SMB) needs the financial resources to keep daily operations going. Believe it or not, the #1 reason that businesses fail is limited cash flow. They simply run out of money to finance daily activity – sounding the death knell for the enterprise. According to the SBA (Small Business Administration), it is inadequate cash reserves that leads to the failure of most startups. That’s where non-mainstream financial companies like GetCapital can really help businesses to stay afloat. They are specifically designed to provide cash for your SMB.
What is Needed for Improved Cash Flow?
So, how can you guarantee that your business will have sufficient cash flow? Here are 8 tips to help you keep your business solvent:
- Set a Budget – that means all incomes and expenses should be accounted for in a clear and unambiguous fashion. If your business is simply haemorrhaging money at every opportunity, it’s the lack of a budget and a business plan that is causing this problem. Every expense category should have a monetary accommodation. Stationery, petty cash, wages, salaries, inventory, water and electricity, rental, mortgage loans, automobile loans, business credit cards etc. Once you know how much you are spending, you know how much your company needs to be taking in to maintain sufficient cash flow.
- Establish a temporary line of credit – we advise businesses to do this sooner, rather than later. One of the biggest mistakes that too many small businesses make is that they only start applying for lines of credit once they are already in a cash crunch. You may wish to check out GetCapital as a viable option for tiding you through a tough time if you anticipate a cash crunch situation. They work with established businesses and have lenient requirements for credit applications.
- Analyse your cash flow – cash flow reports are the only way for you to effectively manage your cash flow. You need to know what happens when customers pay bills, when your company purchases merchandise or stocks up on inventory, and what happens when you adopt point-of-sale systems and take in less cash? Daily cash flow reports, weekly cash flow reports, or monthly cash flow reports may be required.
- Project ahead – this is a great forecasting technique that can help you ascertain your cash flow requirements for the future. A great forecast is only possible if you’re honest about setting realistic objectives, maintaining the right levels of inventory based on sales, and you can accommodate for market downturns.
- Set up an effective collection system – if you’re too lackadaisical about collecting money from people who owe you money, you will run into cash flow problems. Perhaps you are extending credit for too long – for example 60 days instead of 30 days. How effective is your business’s ability to collect money from debtors? Are you able to identify overdue payments in time? How do you plan to collect money owing to your business?
GetCapital’s Advice: Communicate the Importance of Cash Flow to Stakeholders
As you can imagine, having sufficient cash flow in your business can make the world of difference between staying afloat and sinking. It is imperative that you set realistic targets and communicate the company’s overall strategy vis-à-vis cash flow to all its employees and stakeholders in an unequivocal way. Cash flow can make or break a company, and that’s why it’s important for startups to plan ahead. GetCapital requires that a company has been operational for a minimum of 9 months, and a good credit school is typically required to be approved. The minimum annual sales should be $120,000. The company has received and 83% excellence rating on TrustPilot Australia, and 3/5 total score on ProductReviews.com. It’s important to consider the many flexible options that are currently available through non-bank lenders such as GetCapital loans provider.