It is often an unfortunate circumstance when businesses have to operate with weak working capital levels and struggle to meet their financial obligations.
DALLAS, July 22, 2019 /PRNewswire/ -- Both management and employees start to panic, and the urgent brainstorming meeting invites start to roll in. This is, of course, often followed by the impending question of how you can realize quick cost-saving opportunities and may be accompanied by the demand to stop spending cash.
Stephen Sheinbaum, CEO of Circadian Funding, "We understand that all businesses need capital to fuel their growth at some point in time and accessing capital can be a grueling process. So, we created Circadian Funding. Our goal is to navigate your business through the financing process without any headaches or hidden information. Your account representative will be knowledgeable, friendly and communicative. Welcome to a new era of business lending."
In the world of real estate lending, complicated soft and hard money loans are similarly being funded by alternative lenders. Loans are being made to borrowers and real estate investors who would not qualify or do not want to go through the process of getting a conventional bank mortgage.
We had a chance to chat with Sheinbaum of Circadian Funding, who shared some of his insights on how to access capital. Over the past decade or so, Sheinbaum and his team have provided over $2 billion to small business owners across the U.S. Circadian Funding specializes in helping small and medium-sized businesses obtain working capital injections.
Understand your margins
Many business owners fail to have a sufficient understanding of their operating margins. Drill down into the numbers and learn which deals you make money on, and which are loss leaders. Eliminating the loss leaders is an easy way to improve your bottom line.
Manage your AR
Many business operators fail to have proper reporting and management of their accounts receivable. Understanding who owes you money and having a regimented process in place to collect on delinquent accounts is imperative. You'd be surprised at how many otherwise healthy businesses experience cash flow problems because of their inability to manage the collection of their AR. Why go through all the effort to provide a great product or service and then be laid back about getting paid? Cash is the oxygen all businesses need to survive.
Negotiate vendor contracts and terms (preferably those with large commitments).
Once you have studied and understood the "inflows" of your cash flow cycles, you can begin to focus on the possibility of slowing down some of your cash "outflows". You can do this by evaluating cost-reduction opportunities and even exploring whether you can be given discounts by some of your larger vendors for paying early. If you are not incentivized to pay early, manage your payables and hold on to your cash for as long as you can without incurring any penalties from your vendors or impairing your relationships. You are likely quite understanding when your customers need a little more time to pay, and your vendors will likely be understanding if you need a little extra time.