Cash is the fuel that powers your business. Does your business have enough capital in your company to actually fund your short, medium and longer-term goals?

Whatever your business aims are, you’re likely to need some additional finance at some point along the business journey. But, how does this extra cash then benefit the growth, scaling up and (eventually) the end sale value of the business?

The value of extra capital in the business

Third-party business finance comes in many forms. It might mean talking to your bank about agreeing an overdraft extension, or taking out a business loan from a business funding provider. It may even mean looking at specialist finance products, such as asset finance (for buying new equipment), invoice financing (for quickly raising cash from your outstanding invoices) or even government-backed grants and tax incentives for enterprising businesses.

Whatever finance route you take, it’s important to understand the impact that this extra capital will have for your business, and for your longer-term success.

Access to additional funding:

Boosts your working capital – funding gives you the liquid cash needed to stabilise and expand your operations. With enhanced working capital, you can overcome your post-pandemic cash worries and get your balance sheet looking healthy once again. You can also take on new work, projects and customers, safe in the knowledge that you can cover the initial expenditure while waiting for new revenue streams to bear fruit.
Provides investment in your growth strategy – if you’re looking to expand your operations or scale up the business, extra funding gives you the capital to invest in this growth. You have the capital to take on more people, to invest in equipment, plant and new technology, and to scale up the overall capacity of your business.
Strengthens your company’s balance sheet – the health of your balance sheet is determined by the balance between your assets (the things you own, including cash, within the business) and your liabilities (the debts that you owe other people). Additional funding in the business helps to increase your assets, which, in turn, helps to boost your working capital and liquid cash, enhance your asset performance and improve your capitalisation structure as a viable business.
Makes your company more valuable – with more cash in the bank and more capital to draw on, your company becomes a more valuable, and a more attractive proposition in the marketplace. This healthy financial position is invaluable when approaching lenders for more funding, when buying out a competitor or even when selling the business and bringing your exit strategy into play as the owner. However, if you’ve taken on private investors to provide part of your funding, you do have to consider that these investors will likely now own shares in the business – limiting your overall ownership and control of the company.

Talk to us about creating a tailored funding strategy

Whatever the next stage is for your business, the journey will be easier with a robust, tailored funding strategy behind your business plan.

As experienced business advisers and accountants, we have a growing network of funding providers and finance specialists who we work with. If you need extra cash, we can help you create a meaningful funding strategy and access the best funding providers.