Cash Flow Management

CPA

An Essential Ingredient for Your Bottom Line

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Maintaining a Healthy 
​Cash Flow ​In Your Business

82% of business failures are a result of poor cash flow management. Need we say anymore as to how important the management of cash is?  For some businesses, managing cash flow is the key to surviving while for others, it’s an exercise in financial health. 


To effectively manage cash, you must monitor, analyze, and optimize cash flow in and out.  It requires the balancing of income against expense items. Your goal is to ensure you have enough cash on hand to operate your business the way you want to operate it without having to worry about having enough cash to do it with. It doesn’t mean you should be increasing your expenses with the hope you can triple your revenues. It means you should focus on increasing profits without assuming you need to cut back somewhere. That is why it is essential to have a solid financial projection of your business that is continuously updated. Here is how we can help you.

On This Page:

​Cash Management: How We Help You 

Cash Flow Projections

We help you to understand when, where, and how cash needs will take place. We can help you develop a short-term (weekly, monthly), and long-term (annual, 3-5 year) cash flow projections for the capital strategy to meet the needs of your business.

Debt Collection

We have partnered up with an automated collection service provided that connects to your cloud accounting software. You ONLY PAY a collection agency fee (software is free) when you collect your money. You select which past due accounts to send, and the most reputable agency with the  best pricing take care of the rest.

Cash Management Services

Accounts Receivables (A/R)

Managing A/R is essential to a healthy cash flow. We can help you customize receivable analytics to get your receivables to a healthy level and keep them there.  We can also help you monitor and improve your quote to cash and/or cash to cash cycle time

Invoice Funding

"Invoice Funding" or "invoice financing" differs from "Invoice Factoring" in that "Invoice Factoring" companies contact your customers directly to collect payment, thus can interfere with your customer relationships. With "Invoice Funding", companies like Fundbox do not take over collecting from your customers like a typical invoice factoring company. They lend you money based on the amount of invoices outstanding and it becomes part of your line of credit. 

​Funding Your Business

Your business may need more funds to grow, funds to fill in cash gaps or to fund your start-up business. Whatever it may be, we can guide you, help you prepare for, and connect you with these products.

Debt refinancing

SBA Loans

An SBA loan provides small-businesses access to capital guaranteed by the SBA. This capital is issued by participating lenders, which are mostly banks, with more flexible underwriting than conventional business loans as well as lower interest rates, making SBA loans the best loan option for small businesses. 

The Good:

  • Lower down payment requirements
  • Low rates and longer repayment terms so you conserve cash for operating expenses
  • Lower capital injection requirements

The Bad:

  • Designed for established businesses and borrowers with good credit.
  • SBA requires a personal guarantee from every owner with at least a 20% ownership stake
  • Patience: SBA loans require an abundance of documentation and take much longer to fund due to a rigid underwriting
Debt refinancing

Banks

National and community banks offer longer term loans with lower interest rates versus the online alternative lenders. This certainly makes your monthly payments more manageable. 

SBA Loans
SBA loans can be used for expanding your business, real estate vehicle/equipment financing, working capital, and some other purposes. 

Term Loans and Credit Lines
A Term loan is a fixed amount of capital that is payed back monthly over a pre-determined number of years. These loans are typically for investing in your business for future profits. Term loans usually come with some type of personal guarantee. With a credit line, you can draw from it whenever you need it. A credit line is a must for businesses as an insurance policy for any cash flow crunches like trying to make payroll one week. Credit lines can be secured or unsecured.

Vehicle and Equipment Financing
Vehicle and equipment financing is a great option when buying or leasing new or used vehicles/equipment. You can finance the entire cost if eligible and the vehicle/equipment acts as the collateral and security for the loan which helps in keeping the rates lower.

Credit Cards

If you are a new business, build up your credit score by paying off credit card balances each month before it is due. It's important to have a charge each and every month and pay it as quickly as possible. Buy a pack of paper clips if you have to find something to charge.


Which Bank is Best for Small Businesses?

The best all around bank is Wells Fargo. Their unsecured loans and line of credit are their best options. As mentioned earlier, a revolving line is a great option to use for any issues with your cash flow, especially with meeting your payroll. The Wells Fargo line of credit offers reward points similar to credit cards. As for SBA loans, Wells Fargo is the best lender.

Debt refinancing

Alternative Funding

Capital is key to release the power of your business and we are introducing SmartBiz and Fundbox below. There are many other options available out there. Alternative funding is a more streamlined way of getting funds as well as being a faster option. However, Alternative funding will cost more in higher interest rates.


Advice: "Invoice Funding" differs from "Invoice Factoring" in that "Invoice Factoringcompanies contact your customers directly to collect payment, thus can interfere with your customer relationships. With "Invoice Funding" companies like Fundbox, they rely on other factors we explain below. 

SmartBiz Loan Products:


SBA: Commercial Real Estate Loans | Debt Refinance Loans | Working Capital Loans


Non-SBA: Working capital, debt refinance and new equipment purchase Loans (Term Loans)

SmartBiz is an online marketplace that connects small businesses to lenders with software that significantly expedites the SBA loan process by automating almost every step of the SBA funding process.expedites the SBA loan process by expedites the SBA loan process by expedites the SBA loan process by 

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​Business Lenaders

Capital is key to release the power of your business and we are introducing SmartBiz and Fundbox below. There are many other options available out there. Alternative funding is a more streamlined way of getting funds as well as being a faster option. However, Alternative funding will cost more in higher interest rates.


Advice: "Invoice Funding" differs from "Invoice Factoring" in that "Invoice Factoringcompanies contact your customers directly to collect payment, thus can interfere with your customer relationships. With "Invoice Funding" companies like Fundbox, they rely on other factors we explain below. 

Overview of SmartBiz

Loan Products:

SBA: Commercial Real Estate Loans | Debt Refinance Loans | Working Capital Loans


Non-SBA: Working capital, debt refinance and new equipment purchase Loans (Term Loans)


SmartBiz is an online marketplace that connects small businesses to lenders with software that significantly expedites the SBA loan process by automating almost every step of the SBA funding process.expedites the SBA loan process by expedites the SBA loan process by expedites the SBA loan process by expedites the SBA loan process by 

SmartBiz Details

Do you need to refinance debt or expand your business: SmartBiz offers SBA 7(a) loans of up to $350,000 at annual percentage rates ranging from 9.7% to 11.04%.


Do you want to finance a real estate purchase: SmartBiz offers SBA 7(a) commercial real estate loans from $500,000 to $5 million at APRs ranging from 7.38% to 7.43%.


SmartBiz can fund loans within several weeks


For a regular SBA 7(a) loan, the requirement  is to have been in business two years and have at least $50,000 in annual revenue.

SmartBiz Site
Overview of Fundbox

Loan Products:

Revolving lines of credit and Invoice Financing


Fundbox connects to leading accounting software making the application process and receiving funds lightning quick. Fundbox makes qualifying for a loan easier as they do not require any specific revenue or a specific credit score to qualify. Fundbox is great to fill in cash gaps with 1 day funding in most cases.

Fundbox Details

Here are some important points on Fundbox:

  • Convenience: Fundbox is a simple, easy, fast and and by linking to leading accounting software, there is very little information they need each time you look to borrow. They can often deliver funds within a day.
  • With invoice financing, Fundbox does not take over collecting from your customers like a typical invoice factoring company. They lend you money based on the amount of invoices outstanding.
  • Fundbox is a great service to fill in cash gaps or when you find yourself not having funds available for meeting the demands of your business since some customers are late in paying their invoices. Fundbox is your insurance policy to ensure you can focus on your business and not worry where you need to turn to for cash.

The bad:

  • Convenience comes at a cost and the total cost of borrowing is higher than traditional lending options
  • You must repay the funds weekly in 12 or 24 weeks
  • Need $300,000 annual revenue for likelihood of approval


Preparing for Your Loan

You can edit text on your website by double clicking on a text box on your website. Alternatively, when you select a text box a settings menu will appear. your website by double clicking on a text The key to getting your loan approved is knowing what the lender is looking for and the application process is no different than selling a product. “Why should I buy your product” or “why should I lend you money” – the more you put in to your answers, the better your chances get.

  • They want to know you have a good grasp of running your business and the drive to make it grow
  • An organized plan; the lender will know if you are pulling a loan amount out of a hat. Borrow a reasonable amount and ensure your business plan and/or financial documents prove you should get your loan
  • Have your loan application reviewed by a CPA or an attorney and have any business plans and/or financial documents signed off by a CPA. This is called commitment, organization, and an investment for something you deserve

Here are some common reasons that small businesses give when they apply for additional funding:

  • Expanding your business
  • Purchasing inventory
  • Replacing equipment
  • Buying equipment that will boost production
  • Hiring or training new employees
  • Implementing a new system                                                                                                                                                     

Being prepared:

  • Explain how the loan will benefit your business with the right amount of detail
  • Know your numbers: show you understand where every dollar will go and how your business will react to the use of the funds
  • Ensure your cash flow projections take into consideration the added loan payments. They want to know you can make the loan payments
  • KPI’s: The Debt Service Coverage Ratio (DSCR) is a popular measure that lenders use to determine how much debt you can take on. The DSCR measures your business’s income to debt so the higher the better. You will want to be on the north side of 1.25
  • Make sure the loan you are applying for is suitable for your business needs. If your need for funding is based on the seasonality of your business, a line of credit or invoice financing is more beneficial than a term loan. In addition, apply according to the requirements for the loan. if your credit score is 625, apply for loans with a required score of 625 or lower. Fyi, personal credit scores are also considered in most small business loans.
  • Before any lender asks you questions about certain items on your credit report, know exactly what is on your credit report so you can quickly explain it to your lender prior to the application process. It’s better for lenders to understand your situation before they read about it.
  • If the lender requires an X amount of collateral, offer up 2x if you can to increase your chances of being approved. This will show the lender you are serious by risking more of what you own

  • A business plan is always good as it shows the lender you are prepared, know what you are doing and that you are responsible since you will be including at least 1 loan repayment strategy.

Let’s Discuss Your Financing Options

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