Raising Cash For A Small Business

All businesses have to raise cash at some point in time. Additional cash is needed to help companies to expand, at other times extra cash is needed to help a company to cover cash flow issues or to deal with a downturn in their market. Having a good accountant is vital at times like this, they can ensure that you find finance quickly and do not pay more than you have to for it.

Overdrafts, loans, venture capitalists, investors, shareholders, mezzanine debt, micro loans, on-line public money loans, hire purchase, leasing and family or friends are all good sources of extra cash for a business. Your accountant will explain the pros and cons of each option and work out which is best for your type of business.

As well as borrowing money you can also occasionally finance growth by obtaining grants from local development agencies, the EU, government funds and local commerce communities. Even if grants are not available, you can still obtain loans with very favourable rates from these sources.

When you need extra cash for your business changing your cash flow can inject a one off sum of money into your business. Selling older equipment to raise funds and using hire purchase or leasing to spread the cost of buying or running the new equipment that you replace it with is one method of doing this. Their is often the added benefit of bringing you production process up to date and improving productivity and profitability.

If you are owed money by customers you can sometimes improve your cash-flow by raising money using invoice discounting or invoice factoring. This is quite a complicated and specialist way of borrowing money, so you will need the help of an accountant to help you to raise money this way. Mezzanine debt is another option that your accountant can help you to explore, however this form of loan is expensive.

Once you have settled on the best way to borrow money for your business make sure that you use your accountant to explain the terms and conditions of the loan or funding. At the same time re work your business plan and change all your accounting reports to show the new funds and the costs involved in paying them back.

Learn more about improving your cash flow? Visit Accountancy Extra for the best accountants in Leeds and the best accountants in Halifax.