Cashflow Finance

A guide to cashflow finance

Cashflow finance bridges the gap in funds which is created during the period from the time of an invoice is issued to a buyer to the time that the buyer pays for the goods or services. 

Giving you the working capital needed to meet day to day expenses, pay creditors, suppliers and employees. 

On this page, we have outlined some options that are available to you. 

Should you need further information about a cash flow loan or finance please contact us for a no-obligation discussion. Brookfield Finance are cash flow management specialists. We will answer any questions you may have about cash flow finance and find solutions in almost any situation.

What is Cash Flow?

Cash flow (cashflow) is the money that is moving (flowing) in and out of your business in one month. Cash flow goes two ways - into your business and out of your business. 

  • Cash flow comes in from customers or clients who are buying your products or services. Some of your cash flow will be coming from collections of accounts receivable if your customers don't pay at the time of purchase. 
  • Cash flow goes out of your business in the form of payments for expenses, like rent or a mortgage, in monthly loan payments, and in fees for taxes and other accounts payable.
Cashflow finance

Why might I need cash flow finance?

Lack of cash, and not acting on cash flow problems, is one of the most common reasons that small businesses fail - according to The Small Business Administration. "Running out of money," will shut a business down fast. 

But, don't panic, there are solutions for your business's cash flow management in the form of affordable cash flow finance. These often give businesses the brief boost needed to launch or scale. 

Most commonly, cash flow is an issue for new businesses who have outgoings but no paying customers. Or, for seasonal businesses who have both high and low cash flow periods on a regular basis. 

Cash flow finance options


Factoring

  • Your 'invoices receivable' from your customers are an asset, and it is possible to “sell” this asset to an agent. You will receive some of the value of the invoices (usually, around 85%) in advance. The broker or agent will charge a fee or commission.

Invoice Discounting

  • Invoice discounting is a similar method for financing your cash flow, but in this case, involves borrowing against invoices receivable (as opposed to selling them for commission).
  • Invoice Discounting is often preferred to Invoice Factoring because you will remain responsible for collecting payment. So, your customers will not become aware of an external arrangement.

You can find out more about Invoice Factoring and Invoice Discounting on the Institute of Chartered Accountants of England and Wales (ICAEW) website.

Credit Control

  • We will look at methods that can improve your cashflow. For example, by putting in place systems which ensure that invoices or debts are recovered in a timely way. Thus, preventing future cash flow issues.

Trade Insurance

  • Trade insurance or trade credit insurance can protect your business. This is a form of insurance which is designed to protect your invoices receivable from customers who fail to pay you or who fall into insolvency or bankruptcy.

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Why use Brookfield Finance Ltd?

  • At Brookfield Finance, we have considerable experience in helping clients to expand their businesses by accessing the funding that is needed.
  • By considering your unique needs, we will find the business finance solution that is most appropriate for your business and your industry. We will then present you with the most financially attractive options to help you move forward quickly.

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