AR Cash Flow provide tips for financing small and rapidly growing businesses. Cash flow becomes a problem in the instance of a rapidly growing business. This condition occurs especially when the small business is working or supplying for a larger business.
AR Cash Flow outline different methods that can be utilised by the small business to overcome cash flow issues.
The first step involves obtaining an overdraft from the bank. This is done when the owner of the small business and his partner sign a mortgage and provide detailed financials.
The second step involves getting an equity partner.
In the third step, the small business turns its large business customer into a COD (Cash on Delivery) payer. In some circumstances, this can be done by accepting an early payment discount.
Lastly, the small business can bridge the cash flow gap by bringing in an invoice discounter or factor. The discounter (or factor) gets involved in the business and looks at the money that it is owed by the larger business customer. The discounter would then stand in between the two parties and when the small business delivers its goods or performed services, the discounter would pay it. The large business customer would then have to pay the discounter.
AR Cash Flow also emphasise on the fact that these arrangements do not require the aid of property security.