Lots of people think about getting finance as a “need” thing – a short term but undesirable way to solve recurrent cash shortages.
The right, strategically selected finance certainly DOES that. Most of today’s high-tech, Responsive Cash Flow Finance Products empower small businesses to close the structural Cash Gap that is built into their industry.
(Find out about the Cash Gap and how to escape it here.)
However Cash Flow Finance – Debtors Finance, Trade Finance and Unsecured Overdrafts – can actively grow your SME business.
Cash Flow Finance can ALSO help make your business smarter
Here are 5 examples of ways that my clients have used Cash Flow Finance (in particular, Unsecured Overdrafts) to strategically build their business:
- Leverage supplier early payment discounts.
- Leverage supplier bulk buy discounts.
- Invest in efficiency-increasing tools – from a powered lifter to manage heavy items to a tablet PC to make work on the road easier.
- Enabled them to buy out a competitor to build their business.
- Enabled them to diversify by buying a related business.
There’s bad debt – and there’s good debt
Lots of business owners are scared of debt – but there’s good debt and there’s bad debt
Bad debt is debt that’s going to cost you money. Good debt is debt that makes you money. Because if the benefits to your business growth and Cash Flow outweigh the finance costs (AND you have good administration disciplines in your business) then what you have is a good debt.
An Unsecured Overdraft can be either good debt or bad debt.
An Unsecured non-bank Overdraft can turn a good business into a better business AND deliver real achievement and satisfaction to it’s owners.
If it’s used to extend the life of a loss-making business, or to paper over the cracks of poor business administration, then it’s bad debt.
HOWEVER – if it’s used to increase your business flexibility and responsiveness; to increase your operational efficiency; to leverage a new opportunity; or to save you from credit card interest rates – then it’s good debt.
Here are five reason why the right Responsive Finance Overdraft facility can make your business better:
- Immediate Access to Funds: An overdraft facility grants your business instant access to cash when you need it most. In uncertain times, having that immediate financial buffer can be a lifesaver. 🚀
You can use it to take up a new opportunity - Flexible Repayment Terms: Unlike traditional loans, an overdraft allows for more flexible repayment. You only pay interest on the amount you use, not the total credit limit. This can be a cost-effective solution when managing unexpected expenses. 💵
- Build and Maintain Cash Flow: An overdraft helps you manage your available cash smoothly, ensuring that you can continue paying your suppliers and your employees even if customer payments are delayed. It’s a vital tool to keep operations running smoothly. 🔄
- No Need for External Collateral: An unsecured overdraft doesn’t require other assets as collateral. This means you can access funds without putting your family’s future at risk, providing your business with greater financial security. 🔒
- Strengthen Business Relationships: Paying on time – or even early – is a massive trust builder. Having an overdraft facility enables you to demonstrate to your suppliers and partners that your business is financially stable. This trust can lead to better terms and win-win partnerships, enhancing your ability to navigate turbulent times. 🤝
An overdraft isn’t just a financial product; it’s a strategic tool that offers flexibility, liquidity, and security. In unpredictable times, these qualities can make all the difference in sustaining and growing your business.
It has risks – but so does a power saw or an online banking account.
Find out what an Unsecured Non-Bank Overdraft could do for your business. Schedule a call with our Working Capital Strategist Martin Cattach today.
