Business Services

Cash Flow Management

Cash flow management is the practice of monitoring how much money enters and leaves a business. This allows you to anticipate how much money your business will have in the future. It also helps you determine how much money your organization needs to pay its bills, such as salaries and service providers.

Negative cash flow describes the situation in which a business spends more than it earns. There may be times when every business has temporary negative cash flow, but too many consecutive months of negative cash flow can and will lead to business failure.

Our objective is to offer you with experienced guidance so that you may maximize your business’s potential. Cash flow management is essential for every business’s growth. Here are some suggestions for managing your cash flow:

Get your invoicing right We are aware that billing is part of effective cash flow management. After delivering a product or service, invoice immediately. This might harm your business’s financial flow. You should develop the practice of promptly issuing invoices for payment.

Depending on the nature of your service, you may choose to send invoices instantly or frequently. If you are delivering a service, you might consider requesting a down payment or payment in installments. It is an acceptable request.

A provided product or service is the closest thing your business has to cold, hard cash. The quicker you send an invoice to your customer, the quicker you will get money.

Five rules for managing your cash flow

Invoicing is only the start. To maintain a healthy cash flow, you need more than just strong revenue. You need to be able to collect that revenue too. Here are five rules for managing your cash flow and getting your invoices paid faster:

  1. Keep your books accurate and up to date: Your cash flow is only as good as your accounting and reporting. Don’t let this get out of hand. Make sure your accounting information is updated regularly. Then you can see the financial state of your business at a glance.
  2. Don’t be too lenient with your customers: Be direct and fair without being a pushover. A clever but polite invoicing strategy will usually get you a long way. But don’t be afraid to take more formal action if you need to. Always keep a close watch on your accounts receivable turnover. If it’s trending up, it might be time to step up your efforts at chasing payment. As receivables age, their quality goes down, so you should act sooner rather than later.
  3. Keep your accounting and book keeping simple: If you’re not confident with numbers, hire a professional. Use quality accounting software, so you always know your cash position. It will also help you forecast your cash flow for planning purposes. For example, maybe you’re expecting a big order next month. How will you know if you’ll have the working capital needed to expand payroll? Or be able to buy the necessary inventory? Many small business owners get caught out when a large opportunity turns up. They are unable to take advantage of it due to a lack of cash. Don’t let that happen to your business. What’s more, a reliable accounting system will help you track and report on key business metrics. These include accounts receivables aging, operating margins and inventory turnover. Having a good handle on these business metrics will help you manage your cash like a pro – and take advantage of new opportunities.
  4. Keep your business and your personal finances separate: This is essential if you want to understand your business cash flow and forecast how it might change. Mixing your business and personal finances can leave you uncertain about business performance. So, keep them separate. That way you’ll know how much cash your company is generating. Then you’ll be in a good position to properly pay yourself – and use excess cash to strengthen and grow your business.
  5. Build a cash reserve: Access to cash will make or break your business. The ultimate step to managing cash flow like a pro is to build a cash reserve. A cash reserve provides the cushion you need to manage unexpected events. It also gives you the confidence and finances you need to grow your business. It’s not always possible to build a large cash reserve. But if you do, it can insulate you from the economic cycle and the whims of banks and other lenders. It will also let you take advantage of opportunities when they present themselves. For example, you may have the opportunity to pick up inventory at a deep discount or take on a large order or new client. With a cash reserve, you can quickly take advantage of such events. Building a cash reserve puts you in a position of strength. It might mean paying yourself a little less in the short term, but in the long term it will put your business on the path to success. That ultimately means more money in your pocket.

Business Financing

When it comes to small business financing, Vulcan Kapital is on your side. We’ve taken the long, complicated process of applying for an SBA loan and made it more manageable through our streamlined application process and dedicated team. Our experienced professionals are with you every step of the way as you complete our online application and build your financial story. And if an SBA loan isn’t the best option for you, we’ll help you find the right loan for your business from our network of trusted banks and non-bank lenders.

SBA loans:

You might have heard SBA loans are the gold standard for small business owners who want to expand. It’s true. Funds from these loans can be used in a multitude of ways to help a small business. And as a result of the CARES Act, the SBA will pay 6 months of principal, interest, and any associated fees on any eligible SBA 7(a) loan disbursed prior to September 27, 2020.

What exactly is an SBA loan?

We’ll go over the costs, qualifications, use of proceeds and more to help you determine if this type of loan is the best option to fund your small business.

What is an SBA loan?

An SBA loan is a government-guaranteed small business loan that has a long-term and a low-interest rate. The Small Business Administration (SBA) is the government agency that partially guarantees SBA loans and was founded in 1953 to support small business owners across the United States.

The most common misunderstanding about these loans is that the agency lends money directly to small businesses. However, the agency typically does not make direct loans. The SBA provides a guarantee on the loan, promising to reimburse the bank for a certain percentage of your loan if you default on that loan. This guarantee lowers the risks to banks and other lenders, encouraging them to offer these loans to more American small businesses. Many banks and other financial institutions offer SBA loans, but their process, requirements, and fees can vary.

What can you use your SBA loan for?

SBA 7(a) loans from $30,000 – $350,000 from banks in the Vulcan Kapital network can be used for debt refinancing and working capital. Working capital includes operational expenses, marketing, hiring, etc. SBA loans can be used to fund new equipment purchases as well.

SBA 7(a) loans can also be used for refinancing existing business debt not secured by real estate (such as cash advances, business loans, and equipment leases).

SBA Commercial Real Estate loans from $500,000 – $5 million from banks in the Vulcan Kapital network can be used for the purchase or refinance of commercial real estate that is 51% owner-occupied.

Bank Term Loan:

When is a bank term loan the right financing for your business?

A Bank Term loan from lenders in the Vulcan Kapital network is a short-term, fixed-rate loan with stable monthly payments. These loans are a great fit when you need funds quickly and want to lock in your interest rate. The same streamlined process is used for term loans through banks in the Vulcan Kapital network.

Proceeds from a Bank term loan can be used in a variety of ways to meet your business goals. Funds can be used for working capital, debt refinance, new equipment purchase, and more. Additionally, paying off a Bank Term loan responsibly helps to build business credit.

One application does it

There’s only one easy application to complete, whether you are applying for an SBA loan or decide to proceed with a Bank Term loan option. And our team of professionals are available online or over the phone to help you understand and navigate your options.

Bank Term loans are term loans meant to be repaid in a shorter amount of time than the 10-year term of a typical SBA loan. This type of loan can be a great way to get the funds you need to successfully build or maintain your business until you are eligible for an SBA loan.

Customers who qualify for a term loan may have the option to reduce their term loan interest rate by 2% if they choose a prepayment penalty of 5% of the total outstanding balance.

Bank Term loans are offered through the banks in the Vulcan Kapital network for working capital, debt refinance, new equipment purchase, and more.

When a traditional loan isn’t a fit

Most small business needs can be met with traditional financing options like an SBA or Bank Term loan. Sometimes, though, a business needs more flexibility. Not only will we support you through the application process, but we can help you access other financing options through our marketplace with one of our trusted partners. We work with lenders and other financing partners in our network to offer other solutions to shore up cash flow and help you meet your business needs.

Our team helps you explore more financing solutions

You might want to explore other types of financing if your credit scores aren’t where they need to be, if you run a newer business, or if you don’t yet have the revenue required for an SBA or Bank Term loan.

Your dedicated team of Vulcan Kapital professionals will review your unique business needs and help recommend the right option.

You’ve got options

Here are a few of the funding options available for small business owners like you. Don’t see what you need? Just ask and we’ll work hard to find the right solution for your business. Have additional questions? Visit our FAQ

Business line of credit

only pay interest* on the amount of capital that you borrow from your credit line.

Invoice of financing

with invoice financing, you sell outstanding invoices to a lender who advances you a portion of the invoice amount.

Business credit cards

An unsecured credit card can provide the fast funds you need while helping to build your credit scores.

*Interest rate depends on the financial product selected and the applicant’s credit and financial profile.

New Business Formation Services

When you start a new business, it’s vital to make the proper government filings to protect the owners and employees of your future organization. Forming your new business is an important decision that must address state and local regulations. The goal is to operate legally and to shield new or current investments from potential risk. Vulcan Kapital provides new business formation services that can help your new business grow. You’ll benefit with increased credibility and the peace of mind that comes from protecting your personal assets from day one.

Benefits of Small Business Formation Services

State, local and national-level regulations apply to your new small business. It is necessary to register within the county in which your business operates if you plan to provide services or conduct business in that location. You will also want to complete a “Doing Business As” or DBA filing with the correct county. The DBA filing should state the assumed name of your business and its physical address. Our professionals at Vulcan Kapital can advise you on how to file the correct forms with the appropriate county to protect your assets.

Benefits of filing your DBA include:

Branding: use your new business name with new clients or vendors.

Versatility: you are able to form several new businesses & brands registered to the same owner.

Credibility: customers can verify that you are a legitimate business through state and local authorities’ records.

LLC Business Formation for Small Companies

Vulcan Kapital can provide owners with formation services that establish the organization as a Limited Liability Company (LLC). Forming an LLC offers personal protections for owners, employees, and key stakeholders.

Benefits of forming an LLC include:

Asset Protection — LLC owners are protected against creditors in the case the company acquires a substantial amount of debt. Protection against creditors shields your personal assets, such as your property and savings accounts. One of the most important steps to ensure you receive these protections is to properly form the LLC according to regulations and file the appropriate documentation with your state.

Perpetual Succession — An LLC can continue operating after the death of the owner. This benefit of an LLC in most U.S. states is an important protection that vendors and key stakeholders within the company seek since it ensures continued operation in the event that the owner dies.

Tax Savings — An LLC saves business owners on taxes since they are not required to pay taxes at the business level. The way that this tax benefit works is by including the business income or loss directly on the taxes of the business owner. This allows the owner of the business to deduct or write off business expenses from the LLC’s profit. Vulcan Kapital can help ensure that your LLC filing includes these benefits to provide you with the maximum tax savings available.

Large Corporation Formation

Business owners with a workforce larger than 500 employees benefit from filing as a corporation. A corporation filing requires extensive legal knowledge and recordkeeping to ensure that assets and employees are protected from potential debt. This process takes a professional team to advise and ensure that all legal and tax considerations are properly filed. Vulcan Kapital is ready to help business owners analyze the benefits and tax considerations. We will help you determine if filing as a corporation is best for your new business.

Reach out to Us for Your New Business Formation

Vulcan Kapital can help clarify the legal and tax considerations of filing as a DBA, LLC, or Corporation. Your personal and business financial success is our goal, and we have of experience helping small and large companies draft and file mandatory documents. To learn more about our new business formation services, contact us at 800-332-3408.

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