Over the last six months, a very common concern for small business owners has been cash flow. It’s no secret that incoming revenue is essential for all businesses at all times, but during the unplanned closures experienced by many medical and dental practices, it became evident just how crucial access to fundscan be. Who would have thought that almost the whole of 2020 would be considered a “rainy day”!
While there were a number of ways to reduce the harsh impact of temporary business closures such as Government grants, options to pause repayments and in some cases rent relief from landlords, businesses still require a certain amount of cash flow to cover operating expenses that they incur irrespective of whether or not the business is open.
This was even the case for some of the Schemes in place to offer support. It is a requirement of Job Keeper that business owners pay their employees upfront before accessing the job keeper payments from the Government. Credabl was quick to recognise that for many medical professionals there would be a gap and developed the JobKept Overdraft.
Traditionally, overdraft facilitiesprovide readily available cash to pay day-to-day expenses so logically, the same type of facility is one way to support gaps in your cash flow and keep your business running during quiet periods or while you are waiting to be paid for the work that you have done, without having to utilise your personal funds.
The overdraft provides flexibility for businesses to utilise funds at any point in time with interest only calculated on the amount that you use.It is a revolving line of credit that allows you to draw, repay back and redraw back up again as and when you require the funds. Often, overdraft facilities sit dormant in the background, providing a safety net for a rainy day.
In the case of new businesses, a cash flow forecast is often set up by the practice’s accountant. In these forecasts, it is not uncommon to expect negative cash flow in the initial months of opening.
An overdraft facility can come in handyto support the negative cash flow while the business builds up.An alternative would be to use your own personal cash which may mean removing that cash from your home offset account or perhaps a high interest savings account. By establishing a cash flow option for your business, it also means you can keep your personal and professional finances separate.
Convincing a bank to loan you cash can be a challenging negotiation. That’s where we come in. The team at Credabl has been working with medical professionals for decades, examining the smallest details to ensure a trouble-free ride to prosperity.
From choosing a secured or unsecured loan, to proper usage and dealing with unpaid facilities and consequences, we do this every day and we do it well. Contact a Credabl finance specialist today to find out more today.
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