Finding a way to keep your working capital accessible and your company on track with investments in equipment, staff, or other gestures toward expansion can be quite difficult. Often, working cash winds up flowing out to overhead commitments, leaving business owners with the question of whether to tap into reserves or put off reinvestment. With the right financial planning, it is easy to keep cash flow managed without winding up deferring your plans. All you need is the right repayment structure for your business model.

1. Invoice Financing for Cash Flow

Invoice financing is a very popular option because it provides you with access to cash when you need it, and it does that without adding to your debt if someone checks your credit report. That is because you are getting an advance on money owed, and your customers are paying the lender directly. Use the advance for your immediate cash needs, then when the remainder payment comes after the advance and fees are covered, you have the portion earmarked for reserves or savings toward large purchases.

2. Business Lines of Credit To Manage Working Capital

Credit lines are popular in many industries because they work with almost any business model, from invoicing to cash operations dependent on consumer foot traffic. Securing a line to real estate or a titled asset like a vehicle provides the risk mitigation lenders need to offer you larger balances at lower interest rates, so it is possible for your business to get a large credit line even without a deep credit history.

The cash management strategy with credit lines is simple. When you have a balance available, use it for immediate payments and then repay it as soon as possible. Balances repaid within 30 days usually have no interest charges associated with the advance. If you do not fully repay it, the interest is still competitive. The best part is that credit lines are totally reusable.

3. Working Capital Loans

Hard money loans for working capital are another option many businesses use. If you apply for a capital loan that is secured with a real estate asset, you can usually get an operational budget for one to two years from the transaction. Then, when income is earned, you just use it to pay down the balance while you run the business from the budget. After the loan is paid down, the remainder of the budgetary period is profit until it is time for another round of budget financing. That makes it easy to plan for the long term.