Cash Flow
Cash flow is one common measure of a company's financial health. It is typically defined as cash receipts minus cash payments over a given period of time, or, the net profit minus the amounts charged-off for depreciation, depletion, and amortization.
In a small business, there are three basic types of cash flows:
- Operational: cash received or spent from a business’ core activities
- Investment: cash received or spent from investments or acquisitions
- Financing: cash received or spent due to financial activities such as loan or lease payments, issuing or purchasing stock, or paying stakeholder dividends
In evaluating potential cash flow issues, it is important to look at all three categories and blend them correctly to get the clearest possible picture. This blending is usually done in a report called a “Cash Flow Statement” which is an important tool for measuring short-term and long-term profitability.
Small and medium-sized businesses often experience a range of cash flow issues. Commonly, they either do not have the resources they need or they do not have the amount of fluency they want. Cash flow is an important factor that can keep businesses ahead of their competition…and even a profitable business can suffer if it has cash flow issues.
Finding additional resources for improving cash flow can be difficult for many business owners. Many small businesses are new or unique and they may not fit into the models traditional banks and other lenders use to determine eligibility for loans. Lenders sometimes don’t seem to understand how a small business operates, or what a small business owner needs to succeed.
AdvanceMe clearly understands how important cash flow is to each business, including yours. We work with a variety of small business owners, many of whom might struggle with aspects of traditional lending.
We take the time to listen and understand your needs, and take deliberate steps to ensure we treat you, and each customer as an individual. If you have cash flow concerns, we are willing and able to help you explore possible solutions.
Our Merchant Cash Advance is a reusable financial tool that could help you to balance and improve your cash flow. Get business capital as you need it, and spend it how you wish. Better still, with our products, your sales volume will determine your payment amounts—so if your business hits a rough spot or experiences some down time, your cash flow would not be further compromised by trying to make a large payment. Your sales volume will control your payment amounts, so we get paid when you get paid.
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