Financing Tips:
(NC)-Keeping cash flow healthy can be a challenge even in the best of times. No surprise then that a weak economy and the possibility of softening sales can leave many retail business owners faced with a cash shortfall.
"In tough economic cycles, some businesses can run into unexpected cash gaps when sales or collection of receivables get too slow," says Stephen Aikman, national manager, Retail Clients at RBC. "The good news is that there are financing options to help business owners manage shortfalls, as well as options to help them obtain funding for longer-term business plans."
Short-term financing options can help businesses to pay suppliers, increase inventory and cover expenses when they may not have sufficient cash on hand. Options include:
• Overdraft - extends cash resources and protects the business' reputation and credit rating;
• Operating line of credit - funding as needed, to be paid back when businesses have surplus cash; and
• Visa business credit card - a convenient, fast payment method.
Long-term financing options can help businesses invest in overall improvements to their business, such as upgrading systems technology, or purchasing or renovating premises. Options include:
• Leasing - helps preserve cash and working capital for other uses, by structuring the lease to match the useful life of the asset being purchased; and
• Term loan - allows businesses to accurately forecast monthly cash flow through regular monthly payments.
Despite the current economic climate, many of Canada's businesses can still obtain the financing they need. In fact it's business as usual for most banks. "RBC for one has not changed its lending practices and we continue to have steady, significant lending to businesses across Canada," notes Aikman.
More information on these topics is available toll-free at 1-800-ROYAL-20 (769-2520), or online at www.rbcroyalbank.com/business.
- News Canada