photo credit: sytoha / Syed Touhid Hassan

When starting a business, one of the first things you need to consider is the method for financing your business. You need cash for business and other licenses as well as for incorporation expenses. If you’re going the franchise route, then you’ll need to ante up thousands of dollars to buy in. Then there may be training requirements which require the investment of time and even more dollars. All this cash outlay probably happens before you make your first dollar.

Once you’re up and running, you will need to buy supplies, pay suppliers and meet payroll. All of this before the first invoice is generated. In addition to the start up costs, businesses need working capital and cash to survive until they get paid for their goods and services. A big new contract is wonderful. It could really catapult your business t greater success and profit. But do you have the Cash Flow to survive?

Alternative financing companies like Noble Finances provide cash flow for businesses which are unable to qualify for traditional bank financing. Usually these are the newer businesses that are already grappling with start up costs. Businesses with accounts receivable invoices can get cash advances. Why wait 30 days or 60 more days to get your cash when accounts receivable financing or factoring provides your business with cash in 48 hours. Other businesses which accept VISA and MasterCard as payment can get a cash advance against their future credit card sales. If equipment is needed, the cash advance could provide the funds to acquire what you need to deliver. But there is another option for equipment. A cash preservation strategy would be to lease the needed software and/or equipment. That way you wouldn’t have to come up with the cash for immediate and full purchase. So, don’t despair if the bank says no.

Cash flow is critical to business survival. But studies have shown 6 factors are more important predictors of business success than is cash. They are:

1. Setting annual growth targets
2. Developing and executing a growth plan
3. Improving management efficiency
4. Participating in corporate supply chains
5. Operating in an innovative, uncontested or unaddressed market place.
6. Starting your business when you, the owners, are less than 55 years of age.

It’s been said that cash is king. But business success factors have more to do with management than with finances. Banks wisely look at the management team and management skills before giving loans. Business / management know how that is pertinent and applicable to the business is essential… But, without cash there will be no business to lead and manage.

Would faster invoice payments help your Cash Flow? I’d like to invite you to claim access to your *FREE* Report, “Factoring: Why Factoring May Be Your Best Financing Options” by visiting http://www.GetCashFromReceivables.com.

Turn your accounts receivable into immediate CASH! Call 404-374-3384. Although we do not provide loans, we do provide cash flow solutions to businesses that may not qualify for traditional business loans from a bank. Noble Finances offers factoring / accounts receivable financing, equipment leasing, software leasing, cash advances on future credit card sales and pre-settlement lawsuit and law firm funding.

Noble Finances: Accelerating CA$H Flow!

photo credit: Exothermic

If you are determined to make a go of building your own business, then you will be faced with a major challenge because of the lack of an established business track record. Most brand new businesses require some capital in order to get started, but without past business financial information it can be difficult to secure a loan for that purpose.

Banks and other types of lending institutions rely on receiving a variety of fiscal information from small business borrowers in order to make a decision about loaning money to them. If you are just starting out and your business is brand new, then you will not have cash flows or dividends information, or financial statements for your business that you can supply to the lenders. Without that detailed history of business operations and financial reports it is difficult to secure a loan.

Because of this situation, the banker or loan officer handling your small business loan will have to rely on your personal financial information. This means they will be primarily evaluating you, your business plan, and their estimation of whether or not you have the potential to become a successful business owner.

When it comes to new businesses, the lenders are very much aware that a very large percentage of new businesses fail in the first two years of operation. This fact, combined with the lack of a business track record, fiscal information and financial statements that lenders prefer to rely on are what makes the lenders so wary about approving loans for brand new businesses.

In addition to the failure rate during the first two years, the monetary information of most of the businesses that do survive that initial period rarely make a profit and are even considered lucky to break even. For this reason, it is strongly recommended that the person starting a new business venture has enough current assets set aside to cover their living expenses during at least the two years start up phase.

The good news is that in this day and age, with the many advantages that a small business owner can enjoy thanks to the internet and technology solution tools, they are often able to reduce overhead, and as a result, there are more and more companies that are able to become profitable more quickly. In these cases, when an entrepreneur is able to use their personal fiscal information to secure a loan for start up costs, then much of the success of the business will come down to wise and effective working capital management.

When applying for a small business startup loan, you should do as much as possible to make sure that your personal financial information is in as good a shape as possible before turning in an application. It is a good idea to get a copy of your credit report and make sure you know your credit score. Also, having a complete list of your personal financial statements and current assets, along with a detailed business plan, will help the lenders look favorably on your loan application.

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