New Year’s Resolution: Improve your cash flow

It’s a brand-new year and a brand-new chance to review and refine your opportunities for growth. At PMD we champion growth without limits, that’s why we’re always on the lookout for ideas and opportunities that our clients may not have previously known existed.  

With the current economic climate, it would be easy to enter the new year with the burden of rising costs on your shoulders, but the great news is that there is a whole range of business finance available, which can significantly improve your cash flow and leave you to get on with maintaining and growing your business. 

Some of the benefits of improving cash flow in your business. 

You could see significant benefits to your business by improving your cash flow, as you probably know. Cash is what allows your business to survive, without adequate cash flow, covering your monthly expenses like rent, bills, paying suppliers etc. can become a big burden on the livelihood of your company, and if you were considering expanding your business, it would be paramount to ensure that your cash flow is optimised.   

Having the ability to supply your demand. 

Having the funds to purchase supplies when you need them is one of the ways to ensure you stay ahead of the curve in business, get the newest, on-trend, items ahead of your competitors and generally maintain a healthy supply and demand relationship. Improving your cash flow and being able to supply to your customers when it’s needed will stand you in good stead for increased sales and possibly an expansion of your product line. 

Business growth and expansion. 

If your business is bringing in more money than it is spending, then you are on the right path to business growth. By improving the cash flow within your business, you could drastically decrease your shortfalls by being able to respond to possible money-draining problems along the way, ensuring that suppliers, bills, and new purchases can be paid for upfront and decreasing the financial strain on you and your business. 

Less stress and a happier workplace. 

Money is possibly the most stressful part of running a business, ensuring you have enough in the bank to meet your obligations and keep the business afloat is sure to be something to keep any business owner up at night. Being able to maintain a healthy cash flow means that you will be able to run your business more effectively and reduces any workplace stress which can be detrimental to yourself and your staff. 

What business finance options are available to me to help improve cash flow? 

There are a few options available to business owners to help get their cash flow in a positive and healthy state, below is a list of options you could consider, we will go into further detail later with some of the most advantageous business financing options for improved business cash flow. 

The benefits of a Merchant Cash Advance to business cash flow

A merchant cash advance can be a great, low-risk way to access funding to help improve your cash flow. It is a type of business financing that has many benefits over a traditional business loan and is ideal for businesses that accept debit and credit card payments. The lender will provide the business with a cash advance which is then repaid as a percentage of its customer’s card payments through their PDQ machine (card terminal). Meaning that the advance is paid back in line with sales, which is fantastic for cash flow management. 

The lender will approve your application, for a fixed amount, usually within 24 hours, making it an ideal funding option for businesses requiring capital quickly. The cash advance provider will then deduct daily, or weekly percentages of the debit or credit sales taken through your card terminal until the amount is repaid in full, which typically tends to be around 10% of the sale. Payment terms can take anywhere from 3 to 18 months and the nature of your business determines the rate at which your cash advance is repaid, the more sales put through your card terminal, and the higher the amounts, the faster you will repay. 

The speed and ease at which a merchant cash advance is available are its main benefit to businesses and the fact that the repayments are all based on revenue, meaning that repayments are made in line with your sales. Another benefit of taking out a merchant cash advance over other traditional bank loans is that you won’t be asked to present a business plan and credit ratings are not usually considered. Instead, your provider will consider your sales history and you will not be asked for collateral against the advance. 

How invoice finance can positively benefit cash flow. 

Invoice financing helps to manage your cash flow by bridging the gap between the point at which you make a sale and the time in which payment is received from the debtor, meaning that the wait for invoices to be paid is drastically reduced. You don’t have to wait for the usual payment terms to get paid, invoice financing ensures you get most of the cash immediately. 

Invoice financing works by agreeing on an advance amount with your lender, which you will pay upfront and a fee amount on top of this, which means that a percentage of every invoice paid by a client goes to your lender. It’s relatively quick and simple to apply for invoice finance, and once your application is agreed you can benefit from the cash within 24 hours, making it a great option for businesses requiring quick capital.  

Again, the speed at which you can gain access to cash, without a loan, is the main benefit of invoice finance and it’s also a lower-risk finance option, as it is linked to the invoices raised within your business. There is no risk to your assets, it reduces the risk of late payments and bad debts and is also a great support in your business growth. 

How can PMD help improve your cash flow in the new year? 

At PMD, we offer tailored support to you and your business to ensure that cash flow is optimised and to ensure that you are never held back by your finances. Merchant cash advance and invoice finance are two of the best ways to ease cash flow problems and ensure that your business can continue to grow.  

PMD are experienced in securing business finance for our clients and we work with business across all types of sectors to help facilitate growth. We liaise with over 150 lenders and take the hard work out of securing business funding, leaving you to focus on running and growing your business.  

If you really want to get to grips with your cash flow dilemmas this year and ensure a healthy and prosperous start in business this new year, then get in touch with one of our friendly advisors today to see how PMD can you in your business journey. 

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