Raising Cash For A Small Business
All businesses need to raise cash at some point. Sometimes, this additional cash is needed to help the company to expand, at other times it is to help the company to weather a lean time or deal with a cash flow issue. Good accountants can help you to get the finance that you need at the cheapest possible price.
Amongst the sources you can use to raise finance are: overdrafts, short or medium term loans, venture capitalists, investors, shareholders, mezzanine debt, hire purchase, leasing and family or friends. Each method has its own pros and cons, an accountant can help you to understand what those pros and cons are. Most importantly they can work out the cost of each option to your business.
Instead of borrowing money you can sometimes finance growth or set up costs by obtaining grants from local development agencies, government funds, the EU, or local commerce communities. Even when grants are not available from these sources, you can still qualify for loans with very favourable terms and conditions from these sources.
When you need extra cash for your business another way of generating it is by changing your cash flow. One way to do this is to use hire purchase or leasing to spread the cost of buying or running new equipment.
If you are owed money by customers you can use these debts to raise cash or improve your cash-flow using invoice discounting or invoice factoring. Borrowing money in this way is quite complicated, so you need the help of your accountant to raise money in this way. Mezzanine debt is another method that your accountant can explore for you, it is rarely used, but is an option for some companies.
Once you have decided on which loan or grant you are going to use, your accountant will re-work your accountants to show the new funds and the costs of paying those funds back. At this point it is a good idea to tweak your business plan to ensure that those new funds are spent wisely, so that your business moves forward rather than standing still.
Want to find out more about improving your cash flow? Visit Accountancy Extra for the best accountants in Leeds and the best accountants in Halifax.
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