A Small Business overdraft, where would you be without it?  In today’s financial markets are there better options to increase your flexibility and control over your business and cashflow?  Lets look at the facts and the options;

An overdraft has been the traditional way many small businesses have financed their cyclical cashflow requirements.  An overdraft can be secured by Residential / Commercial Property, secured over the business goodwill or unsecured.  It comes as no surprise, the more security offered the lower the interest rate.

This type of arrangement can have a number of shortfalls, these being;

• an overdraft tends to be a static of fixed amount, however as your business expands you start to run into problems, and need to apply for an increase, sometimes an exhaustive process.
• if secured against property then you may be restricted by the available equity in that property.
• when secured against Residential property, this is likely to restrict you from leveraging that property to invest further or to use the equity for personal purposes.

So are there any other options out there that can be considered?  Yes there are, here is a few options you might wish to consider instead of, or in conjunction with your overdraft;

• Debtor Financing, there are a number of options available, financing all of your debtors, a single or selective debtors, single invoices, progress payments.
• Export Sales financing while the goods are being shipped.
• Trade or Import financing, financing purchases / imports to gain discounts.

All of these options are now real alternatives to funding the cashflow cycles of your business without having to tie up your assets as security.  The additional advantage of financing single invoices or selective debtors, is as your sales increase you are not having to increase your overdraft as this type of facility is linked to a customer or an invoice.

So if you are looking at options to better manage your cashflow give us a call on 1300 39 39 20 or send an email to john@financefitnessstore.com.au .  We are happy to analyse your current cashflow trends and projections, then provide you with some options to consider how you can better mange your cashflow.