Maintaining Company Cash Flow During Difficult Times

Whether your company experiences increased expenses and delayed income during peak trading times or your business/industry closes down over Christmas and New Year, maintaining cash flow is crucial. Short-term funding opportunities such as a bridging loan can be critical in preserving cash flow and maintaining confidence in your business.

Cash flow challenges can be just as prevalent where a company is experiencing significant growth as opposed to periods of reduced activity. For example, you may have to pay for raw materials in advance, with a considerable delay, before receiving sale proceeds. Again, the key is to plan ahead, but there are several actions you can consider to assist with cash flow and ensure the smooth running of your business.

Trading forecasts

While past performance is not necessarily an accurate indicator of future performance, it can help. For example, you may have a seasonal business focused on Christmas, or trading reduces dramatically over the holiday period. Trading forecasts help to identify potential cash flow issues allowing you to take the necessary action in advance.

Early Invoicing

Even if your business is not materially impacted by the festive period or other specific periods of the year, it may be different for your customers. It is vital to invoice your corporate clients as early as possible in the run-up to, for example, Christmas and New Year. They could be closed between the last week of December and the first week of January. Consequently, if your invoices are usually settled on the first of the month, this could cause problems!

Stock Clearance

Many individuals and businesses are constantly seeking bargains, perhaps more so as the UK's economic crisis worsens. Capital tied up in old stock is dead money; therefore, stock clearance sales can benefit cash flow. So take advantage of those seeking bargains to turn long-term stock into cold hard cash, improving future cash flow and investment funds.

Consider Efficiency Savings

It is crucial to review not only personal finances but also business finances regularly. You may find several potential efficiency/cost savings for consideration. While many of these actions may seem minor in isolation, the cumulative impact of several savings can be startling. In addition, simple tweaks could significantly impact your cash flow!

Could a bridging loan fill your short-term funding gap?

While the headline services at Greenfield Mortgages relate to short-term property-related finance, we also provide funding for businesses. We come across many clients who have asset-rich companies but need help with cash flow shortfalls from time to time. Using company assets as collateral, you could secure bridging loan funding from ￡26,000-￡5 million.

Unlike some competitors, we don’t take a one size fits all approach to bridging loan applications. Instead, we consider each client in isolation, creating a structure and loan duration to suit their specific requirements. This ensures a degree of flexibility concerning repayment, allowing businesses to return to normal after frantic trading or quiet periods.

You can’t plan for every scenario

Even though detailed planning can often negate or reduce the need for short-term finance, you can't plan for every eventuality. Here at Greenfield Mortgages, we pride ourselves on fast turnaround times with the potential release of funds in as little as seven days. We fully appreciate time can often be of the essence, financial needs can change instantly, and the potentially decimating impact of a cash flow shortfall.

While cash flow issues can be challenging over the festive and New Year period, this is an all-year-round consideration for many business owners. So if you foresee any immediate difficulties or are curious about using bridging loans to assist with cash flow, feel free to call us for a no-obligation chat.