14 Efficiencies to Help Manage Your Business Capital

You may have heard the expression that “The best time to borrow is when you don’t need the money.” This is because lenders and investors will both want to see that you’re able to make your payments, which is always easier while you have cash flow. They’ll also want to ensure that you are organized and involved with your finances behind the scenes.

Even when things are good and you don’t need to borrow there are some basic things that you can do monthly and annually to clean up your records and tighten up any “cash holes”. Here we have provided this checklist. The more you manage these areas, the easier it will be for you to produce what is needed should you need to borrow later on.

THE BASICS

  1. Monitor Cash:  Monitor cash flow regularly by keeping your banking accounts reconciled and the “books” in order so you’ll always know your cash position on a daily basis.
  2. Invoice Timely:  When products and services are rendered, mail invoices immediately!  The faster your invoices are processed by your customer, the faster you’ll see receivables paid more quickly.  Use email when sending invoices, it’s faster.
  3. Pay Electronically:  Use Electronic Payments.  If you pay by ACH, Fed Wire, wait until the day a bill or payment is due.  This “buying time” improves your cash flow, keeping your cash available to you.
  4. Credit Checks:  Conduct customer credit checks to help prevent bad debt.
  5. Discounts:  Offer discounts to customers to collect cash faster. Be sure to monitor this to ensure that the customer doesn’t take the discount and still pay slowly. 
  6. Supplier Terms:  Negotiate longer supplier terms to buy time. Or, if your cash flow affords it, negotiate supplier discounts with your vendor if you pay twice per month.
  7. Buying Cooperative:  Join or form a buying co-operative with similar businesses as your own. When you do this, you can order supplies at the same time on a consistent scheduled to increase your buying power and sharing the savings.
  8. Cut Cost:  Annually audit your profit and loss statements to see where you can cut costs, like getting new quotes on insurance premiums, dropping unnecessary coverage, refinancing loans, or renegotiating better terms on equipment rentals.
  9. Cash in on assets:  Sell equipment no longer needed. 
  10. Inventory:  Consider selling slow turning and obsolete inventory.  Also, use vendors who can provide “just in time” inventory so that you don’t have to order far in advance.
  11. Equipment:  If new equipment is needed, consider leasing instead of buying to preserve liquidity. Leasing does not require down payments compared to many equipment loans. Or, negotiate 100% equipment finance with your bank.
  12. Pricing:  Increase pricing across the board, or with slow paying customers.
  13. Shorten Operating Cycle per customer:  Sometimes it can take over 30 days to order raw materials and manufacture these materials into an end product for a customer(s).  If you add this order and manufacturing time to a customer that pays past 60 days, the time that you are out of cash can easily add up to 90 days or longer.  Shorten this operating and payment cycle by requiring a more immediate form of payment from them, or consider terminating the relationship with slow customers.  You may find the cost of carrying these types of customers are draining your profits.
  14. Cash Flow Analysis: Put together a 13 week cash flow analysis. This is a rolling projection that changes with the performance of your business and helps you determine available cash on a 13 week basis. The cash flow analysis also helps you plan future cash needs, play with projections, and minimize/eliminate surprises.

Hopefully, this list has provided one or two items that you can tweak now to cut back on expenses an increase your cash flow. -But remember these steps are really “good capital hygiene”. The more familiar you are with these areas, the easier they are to maintain and leverage when you need to.

The above information was provided by Robbie Faucett, District Sales Manager for our Cash Flow division. If you’d like to discuss this further or have Robbie present to you and your team, please call 855-717-6400 or complete the form below:


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16 Questions You May Have Asked About Our Cash Flow Program

  1. Do I have to fund all Accounts Receivables?

    No, you have the option of funding all customers of your company, or a select few to meet your working capital need.

  2. What is the cost?

    The cost depends on the following: 1. The total size of the working capital facility needed to fund your company 2. The financial quality of your company 3. The average collection cycle of your accounts receivables. Our Cash Flow programs fit the niche between traditional bank financing and alternative markets (factors). The fee is a percentage of the funding volume. The rate depends on your financials and terms. Once we have your complete financial package, we can have a proposal to you within 48 to 72 hours.

  1. How does it work?

    The simple example is if you have a $1,000 invoice, we advance $900 to your company and place $100 in a bad debt reserve. When the invoices pays, the $100 is released to your company, less the fee.

  1. How are payments and collections handled?

    Your customers make their checks payable to your company but mail them to our payment remittance lockbox. We apply the payment to your account the same day that it is received. Additionally, your company maintains and continues its own collection procedures with your customers.

  1. How does my company qualify?

    We collect a standard Bank financial package along with current Account Receivables and Account Payable reports. If we determine that we can help your company, we will provide a proposal with the pricing and basic structure of the program. If accepted by you, we start the underwriting process toward gaining approval to give you better “Cash Flow!”.

  1. How long does it take?

    Our credit team meets every Monday morning; thus, we can generally have your company funding with Cash Flow in approximately seven days.

  1. How quickly can I get my invoices paid once I sign up with Cash Flow?

    Once you are up and running on the Cash Flow Program, we typically fund invoices within 24 hours of receipt – often the same day.

  1. What is your maximum facility limit?

    Our working capital credit facilities range from $100,000 to $5,000,000. We also have peer banks that do participations with us on working capital facilities that exceed $5MM. Thus, we can grow with you for a long time. The companies we work with generally have sales revenues ranging from $1,000,000 to $50,000,000.

  1. How do I request funding?

    Once approved and your account is set up, you’ll import a funding spreadsheet and copies of your invoices. Generally, we try to fund the same day or within 24/48 hours.

  1. Do I change banks?

    No, you keep your checking and operating account with your local bank. We deposit into your local bank account by ACH (free of charge) or by Fed Wire ($10).

  1. What happens if I terminate my relationship with Cash Flow?

    If you terminate within six months, the termination fee is minimal. After six months, the termination is $0.

  1. Do I have a long-term contract with Cash Flow?

    No, we do not have long term contracts. Your working capital facility renews every year on your anniversary date. Since we do not have long term contracts, you’ll never be charged “unearned fees or minimum commissions” if you no longer need Cash Flow.

  1. Why should I use Cash Flow and not another factoring company?

    Cash Flow is a Subsidiary of top-rated Chesapeake Bank. We are a safe, federally regulated, low-cost option for company’s who need improved cash flow. Because of our excellent pricing and customer service, our average customer stays with us for over five years.

  1. How long has Cash Flow been in business?

    Cash Flow started offering financing options to businesses in 1995.

  1. Are you MemberFDIC insured?

    Yes. We are also members of the International Factoring Association and the American Factoring Association.

  1. What do your existing customers like about Cash Flow?

    We keep it simple! Once approved and funded, the only expense you have is the interest expense. Unlike many funding sources, Cash Flow does not surprise you with hidden and crazy fees. Our customers like us because of our easy and straight forward approach of doing business together.

Need help? That’s what we’re here for. Speak to someone with our Cash Flow team directly by calling 855-717-6400


  • Contact Us

    Fill out this form and someone from Cash Flow will be in touch as soon as possible. Thank you!

  • This field is for validation purposes and should be left unchanged.

Frequently Asked Questions

If you prefer to speak directly with someone just give us a call (855-717-6400) or send us an email (info@cashflowprogram.com) to discuss your needs.

1. Do I have to fund all Accounts Receivables?

No, you have the option of funding all customers of your company, or a select few to meet your working capital need.

2. What is the cost?

The cost depends on the following: 1. The total size of the working capital facility needed to fund your company 2. The financial quality of your company 3. The average collection cycle of your accounts receivables. Our Cash Flow programs fit the niche between traditional bank financing and alternative markets (factors). The fee is a percentage of the funding volume. The rate depends on your financials and terms. Once we have your complete financial package, we can have a proposal to you within 48 to 72 hours.

3. How does it work?

The simple example is if you have a $1,000 invoice, we advance $900 to your company and place $100 in a bad debt reserve. When the invoices pays, the $100 is released to your company, less the fee.

4. How are payments and collections handled?

Your customers make their checks payable to your company but mail them to our payment remittance lockbox. We apply the payment to your account the same day that it is received. Additionally, your company maintains and continues its own collection procedures with your customers.

5. How does my company qualify?

We collect a standard Bank financial package along with current Account Receivables and Account Payable reports. If we determine that we can help your company, we will provide a proposal with the pricing and basic structure of the program. If accepted by you, we start the underwriting process toward gaining approval to give you better “Cash Flow!”.

6. How long does it take?

Our credit team meets every Monday morning; thus, we can generally have your company funding with Cash Flow in approximately seven days.

7. How quickly can I get my invoices paid once I sign up with Cash Flow?

Once you are up and running on the Cash Flow Program, we typically fund invoices within 24 hours of receipt – often the same day.

8. What is your maximum facility limit?

Our working capital credit facilities range from $100,000 to $5,000,000. We also have peer banks that do participations with us on working capital facilities that exceed $5MM. Thus, we can grow with you for a long time. The companies we work with generally have sales revenues ranging from $1,000,000 to $50,000,000.

9. How do I request funding?

Once approved and your account is set up, you’ll import a funding spreadsheet and copies of your invoices. Generally, we try to fund the same day or within 24/48 hours.

10. Do I change banks?

No, you keep your checking and operating account with your local bank. We deposit into your local bank account by ACH (free of charge) or by Fed Wire ($10).

11. What happens if I terminate my relationship with Cash Flow?

If you terminate within six months, the termination fee is minimal. After six months, the termination is $0.

12. Do I have a long-term contract with Cash Flow?

No, we do not have long term contracts. Your working capital facility renews every year on your anniversary date. Since we do not have long term contracts, you’ll never be charged “unearned fees or minimum commissions” if you no longer need Cash Flow.

13. Why should I use Cash Flow and not another factoring company?

Cash Flow is a Subsidiary of top-rated Chesapeake Bank. We are a safe, federally regulated, low-cost option for company’s who need improved cash flow. Because of our excellent pricing and customer service, our average customer stays with us for over five years.

14. How long has Cash Flow been in business?

Cash Flow started offering financing options to businesses in 1995.

15. Are you MemberFDIC insured?

Yes. We are also members of the International Factoring Association and the American Factoring Association.

16. What do your existing customers like about Cash Flow?

We keep it simple! Once approved and funded, the only expense you have is the interest expense. Unlike many funding sources, Cash Flow does not surprise you with hidden and crazy fees. Our customers like us because of our easy and straight forward approach of doing business together.

When the Banks Can’t Lend, Cash Flow is Here

The problem

It’s a beautiful thing when your business has grown in such a way that there is a demand for your product or service. But when that demand exceeds what you can provide in a timely manner, it can become a real frustration point for the client and you as the business owner. Often a business will have to wait for payment on existing accounts before they can acquire or satisfy new ones.

When this happens, most companies will reach out to someone they know, an investor, or their bank to inquire about a loan to fund the gap.

Traditional options aren’t always a fit

The truth of the matter is, there isn’t a ‘one size fits all’ solution for every business in this situation. Borrowing from family, friends, and investors can bring unnecessary strain upon relationships too.

While we always try to guide customers toward a lending solution, there are times that a bank isn’t even in the position to help out.

For a variety of reasons, sometimes a bank may be forced to tell a business ‘no’ either because it is “too new” or “too small.” You can even grow ‘too quickly’ or become ‘too leveraged’ to satisfy the requirements of lending regulations. Even if you’re only stretched thin because you purchased new equipment to sustain your expansion. 

Other times, if a bank can help at all, it’s not nearly for the amount that you needed.

We understand your pain, and that’s exactly why we have ‘Cash Flow.’

Our Cash Flow division brings a unique solution to the table

You see, most banks are required to look backward at your credit history to determine if you qualify, but the Cash Flow model is built around your assets and receivables. This structure provides a track that measures for future growth opportunity.

So even if you’re paid slowly – 120 days out, or if you don’t have hard assets to borrow against, you may still be a good fit for this type of funding. In fact, B2B receivables, or a strong customer base, may be all you need.

Making the assessment

Just to be clear, Cash Flow is not for businesses who need money in 48 hours to stay afloat or to take advantage of a quick offer. We are here for companies who manage their business well, and who could do so much more, with greater profitability, if only they could get paid the day they invoice, rather than waiting.

In as little as 24 hours, our team can assess your needs and let you know if we can help. If for some reason, we aren’t able, we do have other resources that we can provide.

The underwriting process can take several days to complete, but when you meet our team and get a taste of the benefits, we believe you’d find it worth that wait.

You know as well as we do that growing is a good thing. Even if you’ve had a rough spell, if you’ve been able to turn things around, you’ll need better cash flow more than ever.

Let’s make your story a success! Contact Cash Flow now.