Due to the current economic situation, your company could face difficulties to cover the operating expenses and stresses associated with lack of liquidity that could result in solvency problems which would lead to a possible debt.
There are challenges you must face when applying external financing for your company, such as the percentage of financing from banking entities, difficulties in accessing other sources of resources, lack of liquidity, collection cycles, among others; however, you should know that you can currently count on effective financing options to generate liquidity in your company.
Five alternatives to obtain liquidity in your company
It is common for financial failures to affect the normal cycle of your operations, therefore, we will tell you about some of the most used tools and effective for small, medium and large company.
1.- What is factoring?
He factoring is a modern financial alternative to obtain working capital through which companies can transform into cash business accounts receivable.
Is a tool increasingly used that provides a financing option and provides a series of benefits for companies that sell credit, for example: free them from cumbersome collection procedures offering greater flexibility and turn your short-term sales into Cash sales preventing your company from facing imbalances due to lack of liquidity.
He factoring allows companies to liquidate their accounts receivable, reduce the days of payment of its portfolio and in specific cases up to financing costs, what represents best price conditions.
2.- What is Leasing?
He leasing it's a contract whereby one of the parties acquires certain goods against the payment of a mutually agreed price for your use and enjoyment during a certain time, which in general terms will coincide with the useful life and property tax.
At the end of said period, the client may opt for the return of goods, arrange a new contract or buy them for preset residual value. This type of financial lease appears as an effective financing alternative compared to the traditional one with banking entities, since credit is not used.
It is an operation in which ownership of money is transferred that must be returned later. Its characteristic is that the company acquires for itself a good that it will deliver to the client for its use, mediating the payment of rent with the purpose of recover the investment including finance charges and financier profits.
3.- What is Confirming about?
He confirming It is a means of payment that allows granting a series of services to the debtor and being a means of financing and guarantee for the creditor.
It's about the financial services offer by a specialized entity to a user. so that you can use them as payment method and cancellation of debts contracted with its suppliers.
The financial institution is considered as payment manager that the client orders him to carry out to settle his purchases in use of a established contract, before which, the company issues a check or makes a transfer on behalf of the client, which will be sent to the recipient, canceling the existing debt. The entity fits the figure of the third party payment when managing this type of service.
4.- What is Renting?
He renting is the name given to a type of business lease medium or long term in which the intention of the lessee is to temporarily use a tangible or intangible good in which the customer agrees to pay a fixed fee during the term of the contract, while the company will provide services related to the maintenance and repair of said asset.
There are two figures in this contract: the lessor which is the company or entity that will transfer the property and the tenant who is the person who hires the services of the company.
5.- Get advice from experts!
If you want to know more about the tools that can generate liquidity to your company and know which one suits your needs, it is essential that you consult with expert professionals.
After Finance is a signature on specialized consultancy in Business Financing. The objective is to help SMEs, medium and large companies to obtain financial solutions global non-banks.
Integrity, competitiveness, innovation and speed are values of After Finance what makes it the solution for your business, because it has more than 50 signed agreements with alternative financial entities globally.
Enter www.alterfinancegroup.com and learn more about financial solutions.