Without appropriate cash flow a company will fail. There are various ways to generate cash if traditional banking credit is unavailable.
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- Improve cash collection
- Invoice Factoring – Immediate access to cash from raised invoices
- Refinance company assets
- Release cash with a debt management solution
Does your company need a cash injection? Give us a call (0800 180 8440) or complete the form below to speak to one of our experts
Tighten up on Cash Collection
One way you may be able to significantly improve your company’s cash flow position is by improving cash collection. Simple changes such as ensuring that invoices are issued correctly and on time can significantly speed up client payments.
It is also vital to keep an eye on any invoices that are outstanding. Where this is the case these should be appropriately chased up. If a bill remains outstanding the threat of further action can often be enough to ensure payment.
Selling specific bad debts is also an option. This can improve short term cash flow by providing VAT bad debt relief. Funds may also be preserved as the cost of collecting the debt is reduced.
If your company is struggling with debt collection you could consider selling debts to a specialist purchaser.
Invoice Factoring – Immediate access to cash from raised invoices
A significant issue for small and medium sized businesses is that clients do not pay immediately. You may have agreed payment terms of up to 90 or 120 days to get a contract.
Invoice Factoring gives you access up to 90% of the value of your invoices as soon as they are issued. This facility gives an immediate cash injection and significantly improves ongoing cash flow.
The cost of this type of borrowing is higher than a traditional bank loan. However providers of this type of credit normally have a greater appetite for risk and can make a lending decision very quickly.
Invoice factoring can be a fast, effective way to get cash into your business.
Refinance Company Assets
If your company owns physical assets you can use these to generate cash for your business. Asset refinancing allows the business to borrow using the assets as security.
This is an option if your company owns items such as equipment, machinery or vehicles. The value currently sitting idle in these assets can be turned into cash for use in the business.
Up to 70% of the value of these assets could be turned into cash using asset refinancing.
Release Cash with a Debt Management Solution
Rather than trying to raise extra funds an alternative method of improving cash flow is to restructure company debt. If current debt repayments can be reduced the company will be able to preserve cash. The money saved can then be used elsewhere.
There are various company debt restructuring solutions you can consider. A CVA reduces debt payments to a more affordable amount leaving the business with enough cash to continue trading.
Alternatively Liquidating your company and starting again using a Pre Pack solution will write off all your company debt. However this solution needs careful consideration if you have given personal guarantees or have a Directors Loan Account.
Looking to raise company cash? Give us a call (0800 180 8440) or complete the form below to speak to one of our experts.