Cash is the lifeblood of any business, especially a small business operation. Find out how to raise capital, understand cash flow, financing of fixed assets and regular operations via banking instruments. Finance covers the cash aspect of the small business operation.
Fixed assets are normal in business operations. However, financing those assets is the critical issue. If you buy the asset outright, you tie up capital that can be used to expand operations or keep overall costs low in operating the company. You can buy the asset paying a down payment and borrowing funds from a lending institution and make payments over time. This is still a form of purchasing the asset. However, there is another option, leasing.
Every business owner needs to know the difference between insolvency and bankruptcy. Often these two terms are misunderstood and improperly used in conversation. You need to know their correct meaning because both are used in civil law and both have different issues to address during the process. In addition, understanding these two terms builds a better comprehensive understanding of financing your business.
The Small Business Administration (SBA) is an agency of the federal government that provides loans, counseling and procurement opportunities with the federal government. Simply stated: “The SBA helps Americans start, build, and grow businesses”. No other resource exists that is as dynamic and beneficial to the small business owner as the SBA.
In financing a small business, there are a multitude of tools available. One way to finance inventory is by using the 30 day pay program with your vendors. Another tool is seasonal payment program and a third tool is exercising a line of credit tied to receivables or sales history.
There are many different types of bank loans, each having their own respective purpose. All bank loans are categorized into two distinct groupings; secured and unsecured loans. Within in each category of loans there are several different sub-types of bank notes used to make a loan. Both categories require the owner of the small business to provide a personal guarantee to ensure the loan is paid back.
All vendors look for avenues to expand their market share or maintain their market share. Many times it is to their benefit to provide start-up capital to potential point of sale opportunities. If they can assure themselves of a long term buyer of their product or service, then they will give serious consideration to a new business opportunity.
There is one responsibility of all business entrepreneurs that is loathed more than any other. It’s asking for money. First off, you have to find financial resources and then you have to ask for money. This article is dedicated to finding money and how to ‘ask’ for the money from a family member. It is easier than you think.
Just like employees, cash has its problems too. Sometimes it calls in sick. Other times, it shows up late (actually quite often), and for some reason cash isn’t as productive, it doesn’t do as much work as you would like it to do.
