Cash flow funding is a solution to the problem. There are various forms of finance which can help businesses better manage their cash flow and avoid the downward spiral into debt. Alternative finance providers offer direct solutions to help companies balance the books, without high interest loans. The right cash flow funding solution depends on the type of business and its finance needs. Here are the main types of funding available for cash flow purposes.

Merchant Cash Advance

This type of finance is perfect for any business which takes card payments – shops, pubs, salons, cafes, B&Bs, car dealers. It is a fast and short term finance option for businesses, allowing them to lend cash based on their monthly turnover from debit and credit cards. If you have been taking card payments for more than four months then you are usually eligible for an immediate cash advance of up to £500,000.

Invoice Finance

Another way of raising fast funds to improve cash flow is by invoice factoring. If you need the money for the service you’ve provided sooner rather than later, an invoice financier can pay up 90% of the invoice immediately. This allows businesses to free up capital that is locked away in unpaid invoices. It shortens the billing cycle and can help you keep on top of bills and staff costs, rather than having to wait 30-60 days for invoice payments.

Asset Finance

There are always finance solutions, even if you are operating at a loss or you don’t have security to put up against a loan. Asset finance is suitable for agricultural businesses, manufacturing companies or any other organisation which has expensive assets such as machinery or equipment. The funding is borrowed against business assets, from equipment to vehicles. You can also use asset finance to fund a new essential purchase, by leasing or hire purchase with flexible payments.

Getting a grip of cash flow can be really difficult, as you know what expenses you have but often money coming in is beyond your control. Don’t suffer in silence, get in contact with Genie Finance to discuss the range of cash flow funding options.

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At Genie Lending we often provide alternative finance to shops and pubs, to improve cash flow and keep them running day to day. Here are some general tips specific to the industry which could help you get a grip on cash flow.

Don’t overstock

Keep a thorough record of everything you sell every week and every month. Do you have anything leftover which you’re struggling to shift? There’s a fine line between overstocking and ordering too little, and you’ll have to experiment to get it right. Ultimately however, you’ll probably save more money by ordering too less – don’t overstock your store room. This could free up some much needed cash rather than it sitting unwanted in the back!

Increase prices

If you’re not raising enough revenue, it may be time for a price hike. Obviously you don’t want to send your customers elsewhere, so it’s important to keep an eye on the competition and check what similar businesses are charging. Even raising prices by as little as 10p could improve your sales with little inconvenience to your loyal customers.

Shop around

There’s always a better deal to be had if you take the time to shop around for your goods. Whatever you need to buy for the business, see if you can find it cheaper elsewhere before choosing the most convenient supplier.

Merchant cash advance

If you take card payments, then your business will be eligible for a merchant cash advance, which can free up some of the income from those payments. It’s a type of short term finance which uses debit and credit card receipts as a form of security. The amount you can borrow will depend on your average monthly turnover.

Reduce labour costs

A good place to start when trying to reduce outgoings is with labour costs. Try and cut hours where you can, or work more hours yourself so you don’t need to pay as many staff.

Struggling with your cash flow? Speak to one of our experts today to see how we can help.

The post How Shops and Pubs Can Improve Their Cash Flow appeared first on Genie Lending: Business Loan Alternative Finance Specialists.

As an alternative finance solution, a merchant cash advance is available to businesses which have processed credit and debit cards for four months or more. It provides a fast and short term finance option, calculated by the average monthly card turnover. This type of finance is a perfect fit for pubs, restaurants, beauty salons, hotels and shops – but many other businesses can benefit too.

There are many advantages of securing a merchant cash advance – here are the top reasons to choose this alternative finance product.

Revenue based payments

One of the best parts of this solution is the flexible repayments. Because the finance is loaned from the amount of card payments, the lender will take a percentage of your revenue rather than a set monthly amount. Sometimes, other non-related card income is also taken into account. This means that this type of loan really works alongside a business – in months with higher sales you’ll pay back more, and when you’re having a quiet period your business funds won’t all be spent on repayments.

Likely approval

MCAs are based on positive cashflow rather than credit scores and risk evaluation. Therefore, lots of businesses that have been refused traditional loans will be eligible for this type of finance. If you take card payments on a daily basis, you will be able to make your repayments, so there’s a high approval rate.

Immediate cash

Typically, applying for a business loan is a long and tiresome process – even when you’ve been approved it can take weeks to receive the cash. With a merchant cash advance, you’ll benefit from almost immediate finance. Using a very quick application process using your card receipts, you could receive the sum in a matter of days.

Seize opportunities

Because MCAs are relatively easy to get and fast to process, they can help businesses take advantage of market opportunities. For example, if a company knows sales are going to increase (such as the busy Christmas shopping season) and need to buy stock or improve their premises, they can find the cash to do so while knowing they will be able to pay back the finance. Similarly, if there is an out-of-this-world discount on something you need to buy, it makes sense to buy it on the spot rather than saving up over time.

Would you like to find out more about merchant cash advances? Get in touch with our alternative finance experts.

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