How You Can Increase Your Liquidity and Boost Your Working Capital

By: Aaron Robbins0 comments

Cash is at the crux of every business’s ability to operate and grow.

For a lot of business owners, however, managing to boost working capital and liquidity in today’s challenging business environment can prove more difficult than ever.

Whether you’re new to business or simply want a refresher on some of the top ways you can increase your business cash flow, we have rounded up the best ways for you to double down on improving your financial situation — including using a short term caveat loan.

Look at restructuring your business debt via a Caveat Loan

Bank loans and business loans are fantastic at serving their purpose. However, a web of business debt can make you feel stuck and cause inflexibility regarding the movement of funds.

One of the ways you can improve your working capital is by looking to restructure the debt that your business holds, to an option that is more flexible or saves you money.

One of the ways that you can achieve debt consolidation is through using a caveat loan.

Provided that you own real estate property, as a business owner, you can access caveat lending, which will use the equity in your existing property value to release funds to use for a range of business purposes.

If you have sufficient equity in your property, then accessing a caveat loan could be the quickest way to streamline your existing business finances, save interest and free up funds quickly!

If you have multiple business loans currently, you may not meet traditional lenders’ lending criteria, or your credit history may have taken a bit of a hit.

Accessing private lenders such as us here at Diverse Funding Solutions means that we don’t need to run a credit check, which makes a caveat loan a business loan like no other — and could potentially help you to keep your credit score tracking forward rather than registering another enquiry on your credit file.

At DFS, we have some of the most competitive interest rates of all the caveat loans in Australia!

Turn your unproductive or unused assets into cash

When we talk about liquidating your assets, we don’t just mean selling them off.

While selling your unused or unproductive assets is certainly one way to access cash that’s otherwise sitting in your back room, turning assets that aren’t being regularly used into money can look like:

  • Generating income off the assets by leasing them to another party.

These regular incoming payments mean that you can (almost effortlessly) attract additional income for a set period of time.

  • Placing them up for re-sale finance, where you essentially sell them to a financier, keep them for your use, and repay them back in regular instalments.

This, of course, only works if you’re certain you will use them in the future and need an upfront injection of cash. It’s also not a viable option if you’re looking for a fast loan.

Another easy way to use your assets to get an upfront cash injection is to release equity in a security property using fast caveat loans.

Reign in on unnecessary expenses

It’s no secret that the past 12-24 months have been a turbulent time for many businesses in Australia.

Understandably, any business budget has likely been shaken up, but now that things have settled, it’s time to make sure that you have clarity over your budget to make sure there are no funds spilling into areas they don’t need to be.

Overspending can be hard to identify.

Breaking down the components of your budget, looking at alternatives, and prioritising expenses that maintain your business’s functionality can help identify unnecessary expenses and retain more of your funds in your working capital.

Top Tip: If your business has been affected by COVID-19 or the local flooding crises throughout Queensland and New South Wales, double-check that you have used any Government Support for Businesses and Employers.

You may also like to read about how Caveat Loans can help your business recover after flooding.

Manage inventory levels

Global supply shortages and disruptions are one of the many business challenges that can make it tempting to stockpile your inventory.

It’s a fine line between wanting to make sure that you have enough inventory, but not too much that you have thrown all of your money into stock, just so it can sit on shelves, collecting dust.

In fact, if you can quit stockpiling your inventory, chances are that you’ll need less warehouse space!

Less space and more unspent funds on unnecessary inventory could mean moving to a more affordable, compact warehouse.

Fast caveat loans are used by property owners frequently to cover the cost of preparing a business property for sale and covering the gap between buying and selling a new corporate, office, retail or industrial space!

The expected sale proceeds of your existing business premises makes for an ideal exit strategy on short term caveat loans.

Apply for a Caveat Loan

Caveat Loans can provide sufficient funding for a range of business purposes, including to access improved liquidity and raise a company or business’ working capital.

Caveat loans work by using an existing owned property as security, similar to a second mortgage.

Unlike second mortgages, a caveat loan is simpler, as the lender’s interest is registered on the title deed of the property behind any existing mortgage.

As one of the most flexible loan types on the market, you might be surprised to learn how simple, quick and easy accessing fast caveat loans can be for your business.

The benefits of using short term caveat loans in your business

There is sound reason that Caveat Loans are renowned for being the leading hassle-free fast finance solution on the business loan market.

Loan term is short

Short term caveat loans often have a loan term shorter than even their closest short term loan equivalent (second mortgages).

This means that you won’t be tied down for an unnecessarily long period of time, which could cause even further cash flow implications for your business.

Uncomplicated application process with DFS

The fundamental difference between accessing a Caveat Loan through DFS compared to other lenders is that our application process is hassle-free, and the loan is offered under terms relevant to your unique situation.

Other loan products that are provided by a standard Authorised Credit Representative are bound by the inflexibility of an Australian Credit Licence.

The benefit of private funding means that our loan process is incredibly simple; we won’t run a credit check, and we don’t require a formal property valuation or revenue forecasts.

Even if you have bad credit, we take a personalised approach and look to set an achievable repayment schedule and viable exit strategy for the loan.

This means that we can offer fast and easy approvals in as little as 48 hours.

Secured simply

You may be wondering, “how are caveat loans Secured”? A caveat loan is secured by an Australian real estate property by registering our interest, as the lender, on the title deed of the property.

The legal caveat sits behind any first mortgage, which means that the Caveat lender doesn’t need to request permission from the registered mortgage lender, which makes the security process quick and very straightforward.

Important to note: Unfortunately, you cannot use overseas properties to secure your caveat loan.

We can’t accept overseas properties as security as they fall under a different legal jurisdiction.

Competitive interest rate

At DFS, we give standard mortgage interest rates a run for their money, and are proud to offer some of the most competitive interest rates of all Australian Private Lenders.

Flexible loan amount

The loan amount you can access through a caveat loan is typically up to 80% of the equity you hold in your property.

Depending on your property value and any existing property debt, you could have access to far more than any other loan available to you.

Fast caveat loans can be funded in 48 hours

Business owners don’t have time to wait around for a pre-approval application and complex loan requirements to be satisfied; caveat loans settle faster than any other loan types.

You probably spent weeks or months waiting for your home loan to be approved, and this is typical with other lenders.

At DFS, we set repayment schedules, devise a strategy to exit the loan and can have funds to your small business within 48 hours.

How to apply for a caveat loan

You don’t have to go far to access one of Australia’s best private lenders.

While we can’t provide you legal or financial advice, we can give you excellent customer service and make your caveat loan application as seamless as possible.

Simply fill in your details for our express quote or get in touch with us to find out how a caveat loan can help your business boost its working capital and improve liquidity, today!

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