Quick growth might sound like the dream scenario for your business, but it can pose a risk, especially if it impacts your cash flow.
As your business grows, so do your cash flow requirements, with more money needed to pay staff, upgrade facilities and cover larger production costs. If your business expands too quickly or unexpectedly, you may not have enough working capital or day-to-day cash flow to fund the growth.
To prevent this from happening, you need to manage your cash flow wisely, and you may also find you need a quick injection of cash to stay afloat.
Managing cash-flow issues
There are several strategies you can action to deal with unexpected cash flow problems in your business:
- Call in any outstanding debts.
- Renegotiate your supplier payment terms, for example, longer payment terms for larger and more regular orders.
- Incentivise your customers to pay accounts by offering discounts for immediate payment.
All of these are solid strategies to manage cash flow issues, but they still require time to implement and won’t necessarily give you the immediacy you require.
Short term finance for an immediate solution
This is where short term business loans can be helpful. Caveat loans or short term 2nd mortgages are a brilliant way to inject cash into your business.
These types of loans are typically offered by privately-owned companies, which means you can avoid the big banks and their long turn-around times for loan approvals.
Short term finance can be approved in just a few days, which means you will be able to get the cash you need quickly. The paperwork requirements are generally much less onerous than those of a bank as well, making the process much easier.
Pay less interest over the short term
The short term nature of caveat loans and 2nd mortgages also means you will likely pay less interest in total (a loan is typically between 12-24 months). Plus, by avoiding refinancing your current mortgage, you don’t have to risk losing your current rate, or extend the length of the loan.
Need a short term buffer for your cash flow?
Why not talk to us? We are experts in short term business loans.
With 20 years of experience operating in the sector and some of the most competitive rates in Australia at 15.95% p.a, we can help you deal with unexpected cash flow issues, or even provide finance to expand your business. If you would like to find out more call us on 1300 731 317.