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How to manage corporate debt
Companies have two options when they need money, they can issue more stock or take on debt. Having little debt on your corporate balance sheets is the best option. If you are already in corporate debt and you are looking for ways to properly manage it, here are a couple options for you to look at.
Leasing is a great way to run your business with less debt. Leasing is borrowing the equipment and machinery you need to get your business started without having the required money to start it in the beginning. Equipment leasing is a great way to run your business with less debt. Equipment leases allow you access to many types of equipment i.e.; computers, copiers, fax machines, cars, fixtures, and office furniture without having the allotted cash up front or using business credit cards. Even though leasing doesn't bring in cash, it does reduce the amount of cash you have to raise. For the short term, leasing is an excellent solution to gaining what you need now. In the long run, leasing does cost more than buying, but if you need to run your business now, this is a great alternative. Along with obtaining the equipment you need leasing allows for your company to save on ongoing costs such as maintenance repairs and upgrades. Many companies also use factoring. Factoring is usually aimed at a new business or a running a business with less debt. If you are starting a new business, factoring is a great way to keep cash flow steady to keep your business afloat. Factoring is the process of selling your accounts receivable invoices to a third party who then is in charge of collecting on the invoice. The agents in charge of collecting are called factors. Factoring for small business is a great way to provide financial growth. Since cash flow is so essential in business, factoring is the best method to expand operations. Factoring allows a company to sell invoices at a discount and be paid a cash advance before the invoice comes due. Since many businesses monthly sales do not produce cash on time, factoring is a great method to pay wages and creditors. One of the great things about factoring is that it does not tie up assets outside the business and does not involve repayment of debt at some future point in time.
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