This post is one in a series designed to help SME businesses benchmark their business and create a best practice business improvement plan across all of their business processes. You can find the links to the full series here.
Why is it important to be fully aware of business finance options and which ones are best suited to your business needs?
For almost every business, the most important component is access to sufficient working capital. Cash flow is the lifeblood of every business.
Some of the most profitable businesses have been brought undone by having limitations on their working capital; during growth phases, acquiring new businesses or when the market changes.
When looking for finance; whether to purchase capital equipment, fund growth or manage cashflow fluctuations it is important to understand the range of finance options available so you can select the most appropriate option for your circumstances.
How does your business measure up?
Funding options: we are fully aware of the range of government grants, working capital, business finance and cashflow finance options available and we take advantage of those which are best suited to our situation and business.
Here’s a checklist to help you determine how well your business meets this benchmark.
- We are fully compliant with all of our corporate governance obligations.
- All of our financial records are fully up to date.
- We are fully aware of the various finance options available outside of our current banking facility including asset finance, debtor finance facility and working capital loans.
- We have spread our funding asset risk across a range of funding options therefore minimising our risk.
- We have a long term asset purchasing funding plan in place that spreads our funding asset risk across a range of funding options for the future and takes into account asset obsolescence and taxation implications.
- When making asset purchasing or other funding decisions we refer to our accountant and to an independent commercial finance broker to ensure that we are selecting the financing solutions best suited to our needs.
- We are confident that our accountant or Government Grants advisor ensures that we are fully up to date with any government grants available to our business and how to access them successfully.