Cash flow is the net amount of cash being moved into and out of a business. At a fundamental level, a business’s ability to create cash flow is the bottom line of creating a successful business. Without cash flow, a business will not be successful.
However, it doesn’t stop there. While cash flow is the starting point for success, if your SME is only creating enough cash flow to create an operating cash flow, then this can hinder your growth. Operating cash flow is the money flows directly involved with the production and sale of goods from ordinary operations. For a company to be financially viable in the long term, there must be more than operating cash flow.
This can be difficult for a small or medium sized business, that is only a few years old. Many factors can impact your business from having a healthy and consistent cash flow that eventually turns into more than operating cash flow. Sometimes even every day, essential business necessities can disrupt your cash flow, including business insurance.
In Australia, certain types of business insurance are compulsory. If you have employees, you must have worker’s compensation insurance. If you have any motor vehicles, you must have third-party personal injury insurance. Most companies, depending on the type of company, must also have public liability insurance. So, if your small or medium sized businesses fit into the necessary categories you will need to take out three compulsory insurance policies.
While this might not seem like much, three insurance policies, mean three yearly premiums to pay. Insurance premiums for business insurances, especially for SMEs can actually be quite a large sum. This is one of those financial payments that, while necessary, can put a real strain on your business’s cash flow, when all of your yearly premiums need to be paid.
However, this is not only relevant to compulsory insurance, your small or medium sized business might also need extra insurance policies on top of the above to protect things like your business assets, your earnings, and your customers. In total, you might need 4 or 5 insurance policies in place just to protect the everyday operations of your business. This can put a huge financial strain on the cash flow of any SME.
If your small or medium sized business is having this problem. Then you aren’t the only ones. This is not an uncommon issue for SMEs to face. You are not alone in this problem, which is why a simple and cost-effective solution is available to small and medium sized businesses.
Insurance premium finance is a finance solution that allows you to pay for all of your insurance policies in simple monthly payments, rather than yearly lump sums. Non-bank lenders such as Grow Finance, understand that this is a common issue small and medium sized businesses face. Therefore, a solution needed to be created, and Grow Finance’s insurance premium finance was born. Insurance premium funding will free up money in your business for other investments and expenses to help your business grow. The application process is simple, fast, and easy, so if this sounds like a great solution for your business, call 1300 001 420, or read more about Insurance premium finance with Grow Finance, here.