Monday, August 5, 2013

Improve Your Company's Cash Flow

Every small business could use some more coinage!
I write a number of articles on small business financing and how companies can improve their cash flow. I also keep my eyes open for articles by other authors and writers on the subject. Thus, an article in the Canadian national newspaper the Globe and Mail caught my eye. The title, Five Ways to Improve Your Small Business Cash Flow was also catchy. So I thought I'd share it with those of you who don't read Canadian newspapers (primarily, because you aren't from Canada or don't do business there!).

For fear of copyright infringement, I can't list the five. But I can comment on a few and provide a link for you to read the rest. One way to improve your small business' cash flow is to obtain a working capital loan. This it typically a line of credit. A bank credit line provides the best option but, if your business does not qualify because it does not have a high enough paydex score -- the credit rating for businesses -- or an insufficient operating history, you have other options. You can get a credit line against your receivables from an accounts receivable lender. These are more expensive than banks but, if you do this for six months and your lender reports to Dun & Bradstreet, you'll qualify for a bank line in six months. Some companies also use term loans for working capital. This works well if your company is in expansion mode. Your company can leverage other assets to support a term loan. Alternatively, as an owner or investor, you can provide a personal guarantee.

The article gives four more options. In addition, it provides different information on loans than I give. Check it out at Globe and Mail: Five Ways to Improve Your Small Business Cash Flow.

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