Cash flow is essential for a healthy business, but sometimes you need a little help to keep things moving.
If you need extra cash to grow your business, cash flow lending is one financing option that may be helpful.
We explore how it works and how it differs from traditional business lending.
Cash flow lending allows you to borrow funds against expected future revenue for business purposes, such as investing in new equipment or temporarily covering wages.
Cash flow loans can be secured by property, however there are options that don't require mortgage security. They can also offer repayment flexibility to suit business needs.
From a line of credit to a term debt facility, cash flow loans come in many shapes and sizes. Speaking with a broker can help you determine which product is right for you.
Lenders typically look at the health of your business to determine if you qualify for a cash flow lending solution.
Cash flow loans are generally suited to businesses that have gaps in their working capital cycle – such as needing to pay for expenses before receiving customer payment.
The amount you can access with a cash flow loan will depend on your business needs and financial circumstances.
Cash flow loans typically take the form of an ongoing line of credit or a cash injection from a short-term business loan.
While loans used to provide a cash flow boost are usually shorter than a traditional business loan, line of credit options are often revolving and may be subject to annual review.
Cash flow lending is becoming more important for businesses – helping owners manage their cash flow cycle or make the most of a new business opportunity.
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