One of the biggest obstacles that prevents small and medium-sized businesses from growing and flourishing is cash flow shortages. Managing cash flow is a critical aspect of running a successful business. While many business owners focus on revenue streams and cost-cutting measures, there are often overlooked assets that can significantly contribute to boosting cash flow. One way small and medium-sized businesses can bridge the cash flow gap is to utilise key assets to obtain capital, some of which business owners may not even realise there are options.
Here are three hidden assets you can potentially tap into.
1. Outstanding Invoices
Accounts receivable, often considered a passive asset, can be a gold mine for improving cash flow. Instead of waiting for customers to pay invoices on standard credit terms, businesses can explore options like debtor finance (also known as invoice financing or factoring). These financial tools allow businesses to receive a significant portion of the invoice amount upfront, providing an immediate influx of cash. By unlocking the value tied up in outstanding invoices, businesses can accelerate their cash conversion cycle and better manage day-to-day expenses.
2. Unused Equipment
Many businesses possess equipment or machinery that may not be fully utilised. Whether it’s construction equipment, manufacturing machinery, or even office technology, these assets can be monetised to generate cash. Consider leasing out unused equipment to other businesses or selling equipment that is not integral to your core operations. This not only injects cash into your business but also reduces maintenance costs associated with idle assets.
3. Property
Property-secured lending is an additional option that enables you to obtain additional money by using your plant or property as collateral. This is the process of obtaining financing by using your current assets, which is a wise choice if you already own a manufacturing facility or commercial real estate. This allows you to get flexible working capital by utilizing a sizable plant or piece of real estate as security if you currently have an invoice finance facility.
By recognising the above three hidden potential you can get the funding you require to expand and advance your company.
We provide a range of funding solutions designed to unlock value and speed up business growth.
If you would like to discuss your cashflow finance options, contact us today!
Phone:  07 4639 1011 or submit an enquiry
Linkedin
Source: ScotPac
DISCLAIMER: The above content is to provide general information and does not constitute financial, legal or other advice. This means that duties and requirements imposed on people who give financial advice do not apply to this content. For advice contact your accountant or legal advisor.