When you’re running a small business in Australia or any other country for that matter, it’s common to experience some unexpected sales highs and lows. Both sales highs and lows can have a massive effect on your cashflow. Sales too low and your cash balance will become depleted. Sales higher than usual and you’ll need extra funds to pay the input costs before you’re paid from your client.
If you’re experiencing some difficulties in your business, it’s crucial that you learn how to effectively manage your cash flow, as this can make or break a business. So many businesses go under simply because of poor cash flow management and not using cashflow finance options available to them.
Without the appropriate amount of cash flow, you might find there are times when you can’t even pay for equipment repairs, or even pay your monthly bills. These are the times when you need additional cash flow, and a cashflow finance is a perfect solution to help you through this period. Cashflow loans help you grow your business by allowing you to continue operating at 100% capacity when funds might otherwise have held you back.
In this article, we’ll be showing you how you can take advantage of business loans for cash flow stability and growth in your business.
Firstly, you’ll need to assess if you really need a cash flow loan. It’s essential that you assess your business finances before you apply for additional funding. If your current assets aren’t enough to meet your current liabilities, then you may find yourself in need of cashflow financing in the form of an Unsecured Business Loan.
A few tips to help you identify cashflow needs:
Create an income statement – having an income statement will help you determine your business’s expenses and revenues. This will also tell you how much free cash flow you have.
Know the costs of your operating activities – it’s important to know how much money you need to spend to produce your products and services, and the amount of time to take for your customers to pay you. It’s also important to know how much money is currently in your accounts receivable.
User an accounting software – if you’re a business owner in Australia, then chances are you’ve already used or have access to accounting software since this is an essential tool that can help you calculate your business’s cash flow patterns. In fact, you can find several options online, both free and paid tools.
Determine your investment activities – When you are assessing your cash flow, you should also check your current investment activities, and this will include your real estate, equipment, and other investments that you made for your business.
4 Effective Methods to Utilize a Cash Flow Loan for Growth:
Always maintain money on-hand that you can use in the event of an emergency
As a business owner, you never know when a business emergency could rise, and these are the situations that you need to tend to immediately.
It’s important to have the right amount of small business cash flow so that you can afford these necessities, and you won’t be forced to cut down your other expenses. That is why it’s essential to learn the proper way of handling cash flow because this skill will ensure that you have the cash for any type of crisis in your business. To assist this, you can open a business line of credit or apply for a small business term loan
Save enough money for new exciting Initiatives
Whether you’re looking to expand your business, add new technological system, or you’re planning to acquire a new line of inventory, it is important to have enough cash flow that will enable you to fund these projects.
You need to understand that projects like the ones mentioned typically require additional costs, so with added funding, you don’t have to worry about any deficit in your cash flow.
Always check your finances – Don’t borrow more than you can afford.
Another reason why you need to develop better cash flow management is that it is crucial to your business’s day to day operations. In fact, when you don’t have the steady cash flow available, you risk racking up debt that you can’t pay back.
Some business owners in Australia incur too many charges to their business credit card when they encounter issues that affect their cash flow, and this often led to bad debt, which you need to avoid in your business. It’s easy to incur too much debt because & this can affect your credit score, especially if you can no longer afford your loan repayments. The best way to know if a business loan is right for you is to speak to your accountant
Prepare your business to go through the lean months
Honestly, it can be stressful when your business is not meeting its sales goals. It’s important to have the funds available to you to continue with your day to day operation while trying to increase your sales.
Most business owners have difficulties with their cash flow when they are going through a sales lull, which means they can’t afford all their monthly costs. To avoid these kinds of issues, you need to ensure a healthy cash flow by getting a small business loan, which you can use during these times.
Do You Really Need to Improve Your Business’s Cash Flow?
While there are many ways to get a business loan in Australia, Most of these will require equity in property. At bizzloans we offer something a little different. Our business loans are unsecured, meaning they don’t require equity in property. This means that business owners don’t necessarily have to risk their house to grow their business.
While there are many ways to utilize a business loan, using it to maintain your cash flow can enable you to pursue new opportunities.
If you’re thinking of getting a business loan, you need to do your own research and find the most ideal online lender that will provide you the best deal in the market.
You can always contact us at Bizzloans for any type of business loan queries. We’re always available to help your financing needs.
Russel needed an injection of cash to pay his employees while he was waiting to be paid. We were able to have the funds in his account 48 hours after he first applied.
Max needed funds to renovate his restaurant in NSW. He didn’t want to put his property on the line to secure a loan with the bank. We were able to get him over 100k without offering any security.
Anna needed funds to renovate her practice in Adelaide. We were able to get her the funds she needed with only providing her business bank statements and photo ID.