A healthy level of cash flow allows small businesses to ensure operations are maintained efficiently with no interruptions. Ultimately, cash flow harmonises the relationship between income and expenditure, allowing a middle ground of smooth operations where the cash flow achieved from income can cover the required working capital to keep things moving.
This is exactly why Cash Flow Loans can be so important. Here we answer some frequently asked questions about these types of business loans and look at some of the ways in which a cash flow loan can add value to your company.
Put simply, a Cash Flow Loan is a short-term unsecured loan approved in a short period of time, typically within 24 hours. A short-term business loan like this is used predominantly to get through slightly tougher months. It could be because of seasonal peaks in the business or lots of other different external factors.
A Cash Flow Loan allows business owners with the comfort and ease of mind to be able to continue operations, pay suppliers or employees in times of emergencies.
Typically, Cash Flow Loans are provided with very short notice and are designed to be approved quickly. For certain lenders such as us at Capify, completing a very quick and easy 5 question form can lead to an approval decision within only a few minutes, there is minimum paperwork and businesses don’t need to provide a business plan or attend an interview before being approved.
Essentially, a Cash Flow Business Loan is a short-term cash injection to help you push your small business forward. There are a variety of reasons Cash Flow Loans should be considered for small business owners.
They can allow much-needed working capital in an extremely short period of time, granting businesses greater flexibility and reassurance that when they truly need it, cash will be available at short notice.
In certain industries such as construction, wholesale, and care homes, it’s important to consider the importance of a healthy cash net.
Taking construction loans as an example, cash flow can procure materials, pay salaries, and fund new projects. A lack of cash flow could cause a missed opportunity to build your company’s growth and when you own or manage a small business, you don’t want to be turning away work or contracts that could boost your profits.
Cash Flow Loans are primarily for small business owners who require a cash injection by the end of the month. However, any business that is eligible can apply for, and receive a Cash Flow Loan. The cash injection can then be used to pay suppliers, workers, owners or even sustain day-to-day operations to ensure the business is able to maintain itself for the future.
To be eligible for a Capify Cash Flow Loan, you’ll need to:
– Must be a registered business with an active ABN
– Trading for minimum 6 months
– $10,000+ minimum monthly turnover
– Australian Citizen or Permanent Resident
– 18 years+ of age
Alternative finance means the finance you borrow does not come from a mainstream provider like a high street bank. The market for alternative finance providers opened up due to the strict and sometimes unjustified criteria which high street banks hold small businesses to. Hence, alternative finance allows many SMEs to gather the capital they require more quickly and is typically more accessible too.
At Capify, you can find a good guide for how much cash you can raise. You should also consider that many lenders will look at approximately 25% of your average monthly turnover, whereas Capify can consider up to 90%.
On top of Cash Flow Loans, there are also a variety of alternative business loans available. Alternative business loans are just as they sound, like a traditional bank loan, you would apply to an agreed amount and pay it back over an agreed amount of time with interest. The different financing options allow businesses to choose the right financing method for them, given their situation.
Capify does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.