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A new way to help clients with cash flow – the business cash advance

Posted 5 years ago in Advisors by Beeny Atherton
Posted by Beeny Atherton

Whether it’s a late payment or a drop in footfall, unforeseen circumstances can affect the most stable of businesses. These issues often leave business owners with heavy dents in their cash flow. Sometimes, this can lead to further problems when faced with bills that they just can’t afford if funds and revenue are down. So, small businesses need a simple, yet effective, solution to smooth over this cash flow disruption.

Expert Advice

Meeting with their accountants, business owners are likely to be presented with a variety of business finance options. Many of the more traditional forms of funding demand a large amount of paperwork and take a long time to process. But now, thanks to developments in financial technology, accountants have a simpler solution to offer their clients: the Business Cash Advance (BCA). This is an innovative source of alternative funding that is based upon each business’ credit card and debit card takings; making it a flexible option, bespoke to each of your clients.

The Business Cash Advance

A BCA provider, such as Liberis, will look at the business’ previous card transaction data and use it to forecast a sustainable amount for them to borrow. This way, the decision on their funding is based on the business’ potential as well as their existing performance; and it will be responsibly agreed upon.

But it’s the repayment of the BCA that really makes it stand out, particularly regarding cash flow. Working with card terminals, repayment is a fixed percentage of card takings. This is great as it works with a business’ cash flow, rather than against it. BCAs are ideal for seasonal businesses with bumpy revenue, who might struggle to meet fixed repayments of a traditional bank loan. And without any unexpected late fees or APR, it’s a safe, secure, and stress-free solution.

Xero recently added a number of financial service integrations to the marketplace –  learn more here.

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