It has frequently been said that “Cash is king,” and “Cash is the fuel that makes a business run.” There are three essential truths about cash. The first is that every business must have cash—funding—to stay in business, operate well, and grow. The second truth is that lack of funding is one of the biggest reasons for business failure. The third truth is that most businesses need to seek business funding at some point. Thus, a key question that must be answered is “How much funding does my business need?” 

Reasons Why a Business Needs Funding 

Businesses seek business funding to purchase assets including inventory, equipment, and machinery. Funding is frequently needed for working capital to pay for short-term expenses, bridge gaps between customer orders and supplier payments, and stay afloat during slow periods and seasonal downturns. It is needed to help restructure debt, thus reducing costs and making payments more manageable. It’s needed for investing in opportunities and to fund growth, including taking actions to renovate, upgrade, and expand. And it is needed to address unexpected events and costs. Getting funding requires determining how much funding is needed and for what purposes.

How Much Funding Does Your Business Need? 

Consider these tips to determine how much financing you will need: 

  1. Start by reviewing your business plan. Your business plan should guide your spending and investing decisions. How much cash will you need to meet your business goals? 
  2. Examine your budget and create a detailed financial forecast. How much have you allocated to spend versus the cash you have been using? Your business type and industry plus your operating cycle will help define how your funds have been used and how much financing will be needed. Carefully drill into all expenditures and determine what changes, if any, can be made to all expense, investment, and debt categories to yield more available cash.  
  3. Examine your cash flow and project it into the future. How long will it take to get more cash? The key to securing more funding is to get more cash before you need it.  
  4. Be sure to plan for contingency funding.                                                                        

Some Tips to Manage Cash on Hand 

It is wise to carefully monitor cash flow to protect your business. Stay on top of all business debt payments and payment terms. Keep accurate records and examine all client invoices carefully, setting appropriate payment terms. Eliminate extra expenses where possible.

Where to Get the Business Funding You Need 

Once you have determined how much funding your business will need, you’ll need to determine the best sources for your financing needs. These include bank loans, angel investors, venture capital, lending specialists, and alternative sources.

Seek Expert Financing Assistance 

Contact Emerald Valley Financial Services, based in Eugene, Oregon to get the financing your business needs. We provide a wide range of versatile financing solutions including working capital, lines of credit, and equipment financing and leasing. We provide financial services for businesses of all sizes, including startups and businesses that have been turned down by banks. We are here to help you succeed and grow.