SHORT TERM FINANCE ? A SOLUTION TO BUSINESS FAILURE ...

More and more businesses in Australia are closing their doors ? with research indicating an increase of 23% in business failures in 2010.

But why are so many firms failing?

In many instances, poor cash flow management was the fatal blow ? with many firms unable to survive the gap between outlaying capital to fulfil orders and eventual payment.?? And whilst there?s no substitute for sound cash flow, credit risk and receivables management ? one solution for businesses that face cash flow issues could be short term finance.

Short term finance is used in many different scenarios ranging from working capital creditor payments, releasing equity prior to sale or refinancing of existing debt, buying out a shareholder or a partner, bridging the gap between expenditure on assets/inventory/equipment etc and income, commercial property development and completion of construction.

But the traditional banking system doesn?t always make it easy to access short term finance, and many businesses have to look elsewhere for assistance with their cash flow issues.

Specialised commercial short-term lenders are often the better bet, as they can make quick decisions on short term finance and negotiate flexible terms.

As Quantum Capital, a niche operator specialising in mortgage-backed short term finance in Australia says : ?All of our lending opportunities arise out of the need that our clients have to access quick credit decisions and alternative finance solutions?.? When it comes to cash flow ? perhaps it should be survival of the fastest (short term loans!)

Clearly, short-term loans aren?t a sustainable solution over the long-term, they can be a crucial element of business success.

Source: http://blog.jasonberkes.net/2013/01/20/short-term-finance-a-solution-to-business-failure/

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