Why Cash Flow Planning Is Critical

Cash flow planning (CFP) is essential to manage your financial resources effectively. It involves projecting future cash inflows and outflows to ensure that your business has enough cash on hand to meet its obligations.

One of the main reasons CFP is so important is that it allows you to identify potential cash shortages and lets you take action before they become critical. By forecasting cash flow, you can adjust expenses, reduce debt, and find ways to increase revenue, if necessary. This, in turn, helps avoid missed payments, overdrafts and other problems that can damage your business’s reputation and credit rating.

Additionally, CFP helps you (and your lender) make informed financing decisions. With an understanding of how much cash you’ll need, and at what times, you’ll be better prepared to discuss your needs with your lender who will then be better able, prepared, and more willing to help you.

CFP is especially important for companies struggling or losing money, and for owners who don’t have finance expertise or who have an unsophisticated financial staff. Regular CFP enforces discipline; an important aspect for struggling companies to get under control if they want to return to, or obtain, bank financing.

Overall, CFP provides a roadmap for helping you stay on top of your finances so that you can focus on growing your business.

About Celtic Capital
Companies looking for working capital to cover operating expenses, fund growth, increase buying power and take advantage of vendor discounts and rebates turn to Celtic Capital. With an appetite for the more complex transactions, Celtic Capital has a history of success in crafting creative, flexible asset based financing solutions from $500,000 to $5 million with no financial covenants.

As an independent lender, working with companies nationwide, Celtic Capital is willing and able to alter price and deal structure and expand lines of credit to handle its clients’ increased revenues; and when cash flow is an issue, will look toward providing an inventory facility to help offset lost cash flow.

If you know of, or are, a business in need of non-traditional financing, contact Mark Hafner at 800.742.0733 or mhafner@celticcapital.com, or visit us at www.celticcapital.com.