Apart from fixed assets, accounts receivable are one of a business’ largest assets. A large AR balance is both a blessing and a curse. Increasing AR means that sales are coming in, but AR is just numbers on a piece of paper.

When it comes to commercial finance, you typically have limited options. One option is to tap your own finances and inject equity into the business. You could also look for an outside investor. This works well in the startup phase, but is often difficult as your business grows. This is where a loan from a bank or finance company comes into play.

If there’s one thing I’ve learned during my tenure in the commercial finance industry, it is that there are all sorts of business management styles. What I mean is, there are small business owners who have a handle on their business’ financial side and there are others that don’t. Improving cash flow is on the radar for both types.

When you think about business funding what comes to mind? A loan from the bank? Tapping personal credit cards? Using your own savings? Some kind of specialized cash flow financing?

There are many reasons why it is important to have a stable capital base for operating your business. Stability offers safety in today’s volatile markets. Whether the source of your stable capital is equity investment by the owners/shareholders or whether you have some sort of commercial finance loan, the benefits of knowing you have money available at a moment’s notice gives you the flexibility you need as a business owner. 

As 2012 comes to a close, we are fast approaching the holiday season. Everyone’s getting ready to do their holiday shopping, gearing up to devour all that great holiday food and watch football while regretting all that great holiday food they devoured.

Running a small business is challenging. There is usually more work to go around than there are people. With so many things to do, micromanaging cash flow isn’t at the top of the list. Yet cash flow is vital to the growth and success of your business.

No matter what industry you’re in, making payroll is at the top of the priority list for many business owners. Most employees won’t work for very long if they aren’t getting paid. If your staff walks out the door, your ship is sunk. Because of this, many businesses have some form of payroll financing in place to make sure cash is always available to take care of payroll.

What is factoring? Factoring is the process of selling commercial accounts receivable to a factor at a discount. The factor pays the seller of the accounts receivable cash in exchange for the rights to collect payment from the seller’s customer. The seller benefits by receiving the majority of the amount due from the customer immediately, instead of having to wait 30, 60 or 90 days to be paid, and the factor benefits by charging a fee for the service.  

Wow … I can’t believe that 2012 has almost come and gone. The thing that has stood out the most to me from a business perspective is how many companies continue to seek out small business funding. While it seems there’s some economic recovery, the one thing I can tell you is that banks are still holding a tight rein on small business funding.