The Importance Of A Positive Cashflow
A positive cash flow is an essential component for all businesses and the key to ongoing success.
One of the biggest challenges business owners face with cash flow is managing it effectively. Obtaining your accounts receivable can sometimes take up to 85 days and with the chain of money passed down from owners to subcontractors and suppliers, these payments could be pushed out even further.
The industry is facing massive challenges with supply chain backlogs, talent shortages and rising material costs. There is so much to consider when it comes to maintaining, improving and monitoring construction cash flow. The above factors make it hard to determine how to prioritise your cash or set reasonable and measurable goals when forecasting. Delayed payments can add significant pressure to your operation if mismanaged. These issues can stunt the growth of your business and potentially result in the collapse of your operations. For this reason, it's crucial to have the correct knowledge about a positive cash flow and the importance of managing it successfully.
Free Financial Strategy Session
Learn more about cash flow in construction with our virtual CFO. This complimentary session can help you understand more about how to maintain, improve and manage your finances while considering the industry’s challenges & your business needs.
Cash Flow Finance Products
There are multiple finance options available to help better balance your cash flow and bridge the gap to achieve business success and be cash flow ready!
Line Of Credit
Flexible cash flow funding only pay interest on the amount payable. A business line of credit helps you access funding when needed and pay interest for the amount actually borrowed. This flexible product lets you borrow however much you need when you need it and up to the approval limit.
Invoice Finance
If you are waiting for payments on invoices but need cash beforehand. Invoice financing could be the solution. Invoice finance helps businesses turn outstanding invoices into available funds. The lender will fund against invoices and use the owed amount as security, the cash injection can help cover operations or make sure you don’t miss out on any new opportunities.
Business Loan
An unsecured business loan helps you borrow without asset security. Businesses may use this product to expand, grow or be able to better manage cash flow. The lender will not ask for collateral such as property or equipment to secure the loan. Instead, they will look closely at your credit history and how to plan to repay the funds.
Vehicle & Equipment Finance
Financing high-priced assets can help business owners keep hold of cash flow.
Ideally, your business should have enough money to cover expenses for no less than 90 days. Paying cash for vehicles or equipment can decrease your hold and you may be taking a chance on your longer-term cash flow. For this situation, a business vehicle, equipment loan or a finance lease could be a superior choice as it leaves your safety net intact. This implies that you may not need the use other business financing options to help you through a difficult situation. Different sorts of equipment finance and leases are accessible from brokers, banks and non-bank lenders. Advance Lending Australia has a panel of construction-focused lenders who can find the right loan products that specifically suit your business needs.
Comments