Three Alternate Methods for SMEs to Raise Capital and Increase Working Capital Levels

Creative Capital Raising Strategies for Businesses

Traditional bank loans can be hard to secure, leaving SMEs to explore alternative ways to raise capital. If this sounds like you, consider these three strategies.

1. Sale and Leaseback

If your business is asset-rich but needing to raise some cash, a sale and leaseback arrangement could be the perfect solution. You sell your equipment to the lender and then sign a lease agreement ensuring your retain operational control over the asset and face no disruption to you business operations. This allows you to unlock equity sitting on your balance sheet which could have more productive uses, allowing you you to reinvest in growth opportunities or manage day-to-day expenses more effectively.

2. Refinancing Assets

Your business might have taken out asset finance at some point the last few years. You might be 3 years into a 5 year term. Refinancing allows you to extend the term of your loan, reducing your repayments. Its likely you'll have a higher interest rate since the RBA has raised the cash rate 13 times this cycle, but extending your term could significantly reduce your weekly or monthly obligations, increasing your working capital levels.

3. Leveraging Accounts Receivable

Outstanding invoices can be turned into immediate working capital through invoice financing. This option allows you to access funds tied up in unpaid invoices, providing a quick cash injection. This strategy is ideal for businesses with long payment terms or an AR ledger they want to put to use immediately.

Ready to Explore Your Options?

At One Yard Capital, we're here to help you access these alternative financing strategies. Contact our team today for an obligation-free discussion and discover what solutions might meet your business's needs.

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