All companies may face, at some point, cash flow problems.
The disadvantages can originate in ups and downs in income, sudden expenses, late payments, among other diverse causes that it is important to know, to find them a solution before they occur and lead to serious financial problems.
In economic matters, it is a more or less true fact that emerging companies incur losses during their first year and sometimes during their second year and as they adjust to market flows.
It means that inaccurate calculations can be made in the hiring of personnel and the corresponding payroll payment; missing equipment; need for advertising and adjustments in production processes. Consequently, money is needed to solve the needs and take advantage of growth opportunities.
The expected money does not arrive
The companies that work by contract can find themselves in difficulties if their payment is delayed, either because the contractor had any inconvenience or because there are missing details to comply with the terms of the contracted work. The lack of money has an impact on the payment to the employees, the purchase of materials, the payment of the rent and even the provision of gasoline to drive the vehicle.
If the expenses in the electronic invoice, the rent of the premises or the payment of public services are higher than the income of the month, the company can get into difficulties.
It is not good to have too much inventory, when you are a merchant or manufacturer, it can result in a quantity of merchandise in the warehouse that is not sold as quickly as expected. And if it is not sold, at the rate of acquisition or manufacturing, there will be no availability of cash.
Sell on credit
Credit sales are an excellent initiative for customers to buy more. But if the credit is too much, the waiting time is extended to have money with which to make more purchases.
In the United States, sales and work fluctuate according to the season. There are seasons when income is high; but there are also those in which the income is low and even non-existent. The execution of an annual budget helps to avoid liquidity statements, during the seasons of low sales or low demand for work.
Entrepreneurs must keep in mind the mechanisms that exist to avoid critical situations due to the lack of cash flow; But we are aware that, on many occasions, financial support is needed, so that the business continues to function.
In LONDOS we set out the mission of supporting and training small businesses that are in trouble with cash flow, with smarter financing solutions .
We put at your disposal credit lines with low interest rates, through a simple procedure: the entrepreneur fills out the form on our website and we contact you, by email.
Through this procedure – which includes an evaluation of the business project – the interested party can acquire a credit online with us to manage all these unforeseen expenses.