Small Business Cash Flow Loans
Businesses, cash flow, supporting the England football team, and life all have one thing in common – they have their ups and downs. Sometimes, it feels like you’re constantly fighting fires running your company. Cash flow is, arguably, the most important business performance metric in any firm and when cash flow is tight, the effects are felt across every area of an organisation.
In this article, the Panthera team will explain what a cash flow loan is, who they are for, and how you can use them to give your business the boost that it needs to trade comfortably.
What is a cash flow assisting loan?
A cash flow loan is a short-term solution for any business facing cash flow difficulties. They normally come in the form of an unsecured loan from a private source (for example, a specialist internet-based lender) rather than a bank. With this type of loan from these types of lenders, none of your personal assets will be at risk(*) but the interest rates will be much higher.
Who are these loans aimed at?
These loans are for generally healthy businesses experiencing cash flow difficulties.
You might be asking yourself “why would a successful business be facing cash flow difficulties?” When clients don’t pay their invoices on time even though you might be hitting your sales targets month after month. you may find that there’s no enough money in your bank to meet your outgoings.
This is why even the most successful businesses can face cash flow troubles. But that’s not the only reason you might want to take out a cash flow loan.
For example, if you have a big event planned (like a trade show that may cost you £10,000 all in with stand fees, displays, and so on) and you want to make sure that you can continue to meet your outgoings having invested available funds on such a one-off expenditure, then a cash flow loan might be the answer.
Cashflow loans can be used for making sure that your business is financially secure while waiting for customers to pay their invoices but they can also give you a level of comfort when you’re making speculative investments in the future of your company.
What are the benefits of these loans?
As we mentioned earlier, cash flow problems affect your business in every area. If you have a plan that’s all lined up and ready to be executed but you find that your customers seem to be holding payment of invoices back en masse, you may have to delay or, worse, scrap that plan.
We can help
If you would like some advice about whether a cash flow loan is the right option for you and your business, get in touch with our team. We can also help you decide whether any other options are available to you to help you be able to trade with the cash you need.
In addition, before you make an application to a loan provider, our team have years of experience across multiple sectors in putting together the financial projections and management account statements lenders will want to see.
Call us today on 01235 768 561 or email enquiries@pantheraaccounting.com for more information.
(*) Panthera tip – some cash flow loan providers may ask you to sign a personal guarantee. Always get the opinion of a solicitor before signing such an agreement because a loan provider may come after your home if your company can’t keep up repayments.