Alternative Financing is Best for Boosting Working Capital

by | Mar 7, 2016 | Financial Services

Latest Articles



Having enough money to simply launch a business is not enough to guarantee success. Careful planning and having some additional funds to put into the business will make the world of difference for boosting working capital. Alternative financing allows a business owner to lend money outside of the traditional bank lending options, most of which can be difficult to obtain and will carry high interest rates. Available from a lot of online marketplaces, this kind of financing may also be referred to as ‘peer-to-peer’ lending. The amount that can be borrowed from loan providers will be smaller than they would if you were to lend from another financial channel, but it is perfect for improving working capital. Read on to find out why.

Manage Cash Needs

Do you feel anxious each time pay day approaches, simply because you are unable to manage your cash needs accordingly? If so, you could lose customers, lose employees and lose face! Company image can be affected negatively if you are not prepared with adequate financing. Suited to growing companies, this financing choice is linked closely to the balance sheet of a company. When you pay thought to the fact that day-to-day operations can be managed smoothly and hiccups can be avoided, getting a loan is a wise move for managing cash needs.

Getting Through a Financial Crisis

The sooner your company grows, the better. Nevertheless, a business that expands at a rapid rate might also struggle with financial woes, unless the boss explores their alternative financing options, that is. Financial predicaments can be swerved if you learn how to use lending as a way of building working capital. A major financial crisis can be difficult to recover from, particularly for new businesses. Whatever the extent of the cash squeeze you are faced with as a business owner, alternative financing techniques will prove useful.

Main Types of Alternative Financing

So, now that you are aware of the ways in which financing can have a positive impact on working capital, you can learn about the main types of alternative financing. Cash credit or a bank overdraft is the route most people will go down, but this can be extremely costly. Trade credit is a desirable option, because the amount of credit can be extended if the firm is trustworthy and has a bright future ahead of it. A letter of credit may come with a lot of terms and conditions, whereas working capital loans are the best option for short-term lending because they are a bit less complex.

The alternative financing options available from UCapital are suitable for new and established businesses. Call 1300 1234 55 to learn more.

Similar Articles