Business Cash Advance & Business Financing Alternatives 

See Your Business Cash Flow As Your Lender Does

Operating capital for improved business cash flowUnderstanding cash flow and your business’s liquidity – its ability to handle all immediate operating capital needs – is understanding the financial health of your business. Lenders look at your business either from a liquidity perspective or at your company’s “Current Ratio”. Seeing your business as your lender does is a financial education and a necessary preparatory step to pursuing operating capital financing.

Your company’s liquidity, or operating capital, is the difference between your assets, including cash on hand, accounts receivables and inventory, and your liabilities, including all the loans and accounts payables. If your company has $250,000 of assets and $200,000 worth of liabilities, your liquidity is $50,000.

Being aware of your liquidity, by keeping both the company’s assets and liabilities in mind gives you the most realistic perspective of your company’s financial health. A trap business owners can fall into is being aware of their assets and cash on hand, but forget about those out-of-sight liabilities. This is similar to the situation where children make their beds and then stuff all their toys under it and call the room clean, but Mom (just like your lender) knows that the liabilities are there.

The other method of measuring cash flow is the Current Ratio. This is a ratio derived from dividing your current assets by current liabilities. Taking the example above, the current ratio would be 1.25. A current ratio above 1 is healthy and the higher the number the better. Dun & Bradstreet calculate industry current ratio averages, so you can compare your business to others in your trade.

Knowing where your company’s Current Ratio is and what ratios are in your lender’s loan criteria helps you set sales goals and financial targets to bring your current ratio in line with what is necessary to get the best interest rates and financing packages.

If your cash flow situation is tight and bank loans are not an immediate option, US Business Finance Corp’s team of financing solution specialists will work quickly and efficiently to support your operating capital requirements. Fill out our simple Business Cash Advance Application or call us to see how easy and quickly we can help you deal with your operating capital challenges with our business cash advance program.

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