Remember that the cash position of a company corresponds to the difference between the working capital and the working capital requirement. This is known as cash flow difficulties when the payment term of the receivables is too long. And conversely, when the payment period for suppliers is too short. We also talk about cash flow problems when the company can not turn the accumulating stocks and receivables into cash fast enough. This is essential to deal with the payment deadlines granted by suppliers.
Corporate cash, a recurring problem?
Lack of cash is not inevitable, but can prevent you from moving forward. In fact, a fragile and even negative corporate cash flow is not synonymous with good health. Yet solutions exist to increase your cash flow.
How to finance your cash?
The first solutions to finance the cash flow of your company, without financial products, are based on targeted actions. It may be wise to reduce payment delays or increase supplier delays.
To these solutions are added other strategies, namely:
- The bank overdraft : the overdraft applies as soon as the account of a person is debtor that is to say as soon as it passes below zero. One can vulgarly relate an overdraft to a credit over a very short time within the limit granted by the financial institute. The point of attention of bank overdraft is its relatively high cost (it can reach 12%). Its cost is explained because no guarantee is required for an overdraft authorization.
- Factoring : Factoring is a commercial strategy whereby a financial company (in other words the factor) takes over the debts of a third company, on payment of a fee. commission. Factoring can be presented as an outsourcing solution for receivables.
- The bank discount: the discount corresponds to the transfer of a negotiable instrument (characterized by a bill of exchange, promissory note etc …) to a bank in exchange for immediate cash advance. To summarize, the discount allows a company to quickly obtain funds from its bank.
- The dailly : the dailly is a credit-type product that allows a company regardless of its industry to receive funds through a bank and by way of bill.
An alternative solution: crowdlending
Crowdlending is literally defined as ” ready by the crowd “. It is an alternative source of financing within the framework of crowdfunding. This allows SMEs to raise funds from individuals, but also to qualified and institutional investors via a dedicated platform. The role of such a platform is to provide a quick, simple and flexible solution to companies meeting a specific need, such as the financing of stocks or cash.
See you on Best Credit
As we saw earlier, the cash flow difficulties of small and medium-sized businesses are common, and each solution has its own advantages. Crowdlending is distinguished by the speed of access to funds and the flexibility it allows: without insurance or guarantee, deadlines adapted to the activity of the company, the ability to repay without fees …
Do you have a need for corporate cash? Fast and tailored to your needs, Best Credit financing solutions support French SMEs, with a 100% online solution. We connect investors who want to contribute to the real economy and companies looking for financing. We propose to finance you all types of needs, material as immaterial.