Finding Finance Inside Your Business

by : Tom Heath



Many businesses arefinding it increasingly difficult to secure funding for expansion at the momentdue to the credit crunch, but there are still ways to raise the money that youneed for expansion.

The first thing toremember about borrowing money is that you will need to be able to pay it back,so make sure that any loans that you take out are both affordable andnecessary.? There is no point in saddlingyour business with additional debt unless you have specific goals from the loan,and know exactly what you are planning to do.

If your business is in agrowth phase, the first place you should look for cash is in your owncompany.? By examining areas where youcan save money within your existing operations, you may find that you are ableto free up a significant amount of cash for increased day to day expenses.

Simply by switching to a youmay well be able to save a considerable amount of money each month on the costof depositing cheques and other day to day charges that your bank applies. ?Depending on the way you use your account,finding one that charges you less each month could have a major impact on theamount that it costs you to run your account.

One area where manybusinesses can find additional funds is to rationalise the way in which theychase payments.? If your customers onlypay you once every 3 months, then you are missing out on the interest that youcould be earning on the money if it was in a .?Also, many larger companies will wait until they receive reminders aboutpaying you for the goods or services that you supply, which could really impacton your cash flow situation.

Managing your incomingfunds can only go so far to save you money, but you can also go further andmake more use of your surplus funds.? Aspecial business savings account will typically pay you a much higher rate ofinterest on balances than a standard account, and by investing money on aregular basis you will soon build up enough cash to give you the ability tofund expansion or cover your expenses during a quiet period.

Whatever you do withyour business money, it is always important to regularly review your originalbusiness plan to ensure your business is moving in the right direction.? Expansion at the right time can give you greateropportunities to increase revenue, but remember that it will also result inhigher costs, so make sure that the market is able to support your endeavours.

By keeping on top ofyour costs, and planning any expansion to match with what is available fromwithin your own funds, you will reduce the likelihood that you need to rely onsecuring your froman external source such as a bank which will save you a great deal of money inthe long run.