Cash flow financing

Cash flow financing – a form of financing in which the loan is backed by a company’s current or expected cash flows. This differs from an asset-backed loan, where the collateral/security for the loan is based on the company’s assets. The schedules or repayments for cash-flow loans are based on the company’s projected future cash flows. Debt covenants on these loans are typically focused on adequate levels of EBITDA growth and margins, as well as manageable and sustainable levels of interest expenses. This is also known as cash-flow loan.

Cash-flow financing is often used by companies seeking to fund their operations, or acquire another company or other major purchase. Companies are essentially borrowing from cash flows they expect to receive in the future by giving another company the rights to an agreed portion of their receivables. This allows companies to obtain financing today, rather than at some point in the future. Timely operational expenditures, such as meeting payroll requirements, Inland Revenue obligations, and stock purchase would be some of the reasons for cash-flow financing.

Here at Allied Funds we can offer structured solutions in order to assist and facilitate business cash flow finance.

Finance solutions for small businesses – $10,000 – $500,000

The Small Business Index has risen to its highest level in three years, but small companies still continue to face significant challenges. Healthy businesses with sound revenue models spend a lot of time and resources on cash flow, a situation that can place growth opportunities on the back burner. Getting the vital funding in place means these companies are able to take advantage of growth opportunities. In reality, the perception has been that the only viable option is to go to the high street banks, although many see this route difficult – quite often faced with hundreds of hoops to jump through when applying for the high street loan, only to find out they are declined. However, with new funding options available, small businesses are starting to jump on their growth opportunities.

Simple to qualify

• 9 months in business (2 years for internet)
• Registered in any country in the world
• $2,000 minimum average monthly turnover
• 51% ownership (director’s guarantee)
• acceptable business type