Whether for a substantial project or an equipment investment, nearly all businesses sometime find a need for financing solutions that cannot be resolved by traditional bank loans. The nature of the project may determine the sources to consider for capital influx. In some cases, grants or public partnership may be appropriate, if the project or growth will provide a substantial community benefit of some sort.
For investments in growth of facilities or workforce, or for additional equipment needs, there are means of alternative financing that can be secured by the value of land, buildings, fleet vehicles, or equipment held by the company. Whatever the case, for the company that is seeking additional capital for ongoing business needs, the plan should include efforts to avoid additional substantial debt, which brings with it ongoing payment obligations and additional costs of interest and fees. Generally, the various financing options available must be considered individually, based on the needs and capabilities of the company.
Equipment Lease
Many tax and accounting benefits may flow from equipment lease arrangements for businesses that use substantial machinery, electronic or medical equipment, or even one that owns a large vehicle fleet. Structuring the ownership and payment of company property according to principles of maximum potential ROI with minimum capital outlay often takes an astute financial guide, particularly in industries with large equipment needs that may change frequently, such as medical practices.
Invoice Factoring
Companies that have some substantial history in business along with a regular customer base may have accounts receivable that can be accessed for ready working capital. Many finance companies invest in invoices, allowing the company that generated the business sales to benefit from cash flow for any purpose without accumulating additional debt that costs money in fees, interest, and continuing monthly payment obligations.
Other Options to Consider
There are many ways and means to generate financial flow in business, including:
- Inventory finance
- SBA loans
- Grants applicable to specific projects
- Private investors
Working with skilled financial management experts, most companies find that they can have access to cash as needed for growth and working capital, using the resources available to them with cautious creativity.
Most business leaders understand that the ebb and flow of ongoing company finance often requires a ready source of financial support as a useful supplement to the revenue stream that the company generates in the course of business. Most company presidents are not necessarily experts on taxes and investments, accounting and finance, and all the other specialties that come into play in making wise and effective financing plans, however. It is usually worth whatever effort is required to locate skilled financial guidance in seeking financing answers that fit the company’s needs within the particular industry.
While a lot of financing options may be available in the market today, the costs, benefits, risks, and value will vary substantially from one company to another, and different strategies will make more sense in various industries. Creating a financial strategy team within the company that works with financial professionals outside of the company to formulate and achieve a workable financial strategy is the first step to generating the resources and capabilities that the company needs to grow and thrive.