Rabu, 16 Ogos 2006

Decide How Much You Need and For How Long

If your financing needs are greater than your asset base or profitability, you may need to consider equity finance (financing the value of the shares of your company) instead of term lending, especially if you need finance over a long period. However, these alternatives are not mutually exclusive and you may end up with financing from a combination of sources. Ask your advisers to help you decide what types of finance are most suitable for your business.

You must work out how much you need to borrow. That's why preparing a cash flow projection is important. For example, if you spread the payments for your investment over a period of time by taking out a bank loan, a cash flow projection will help you decide how big a capital injection is needed to cover any anticipated cash shortfall.
Forecasting is not an exact science so you should aim to raise finance slightly in excess of your projected needs to allow for a margin of error.


For more on planning your cash flow visit:

www.empowermentzone.com

www.cashflow-solutions.com

www.cashflowindustry.com

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