Skip to content
American ExpressAmerican ExpressAmerican ExpressAmerican ExpressAmerican Express
  • Card Accounts

    • Your Account
    • Activate a New Card
    • Register for Online Services
    • Amex Mobile App Features
    • Add Someone to Your Account
    • Moving Abroad? Transfer Your Card

    Business Owners

    • Your Account
    • Activate a New Card
    • Register for Online Services
    • Membership Rewards & Travel
    • Add Someone to Your Account

    Other Accounts

    • American Express @Work
    • Online Merchant Services
    • International Payments for Businesses

    Contact Us

    • Support 24/7
    AustraliaChange Country
  • Personal Cards

    • View All Personal Cards
    • Learn About Credit Cards

    Popular Personal Cards

    • The Platinum Card
    • The Qantas Ultimate Card
    • The Explorer Card

    Cards for Business Owners

    • View all Business Cards
    • Popular Business Cards
    • Manage Your Business

    Corporate Cards

    • View All Corporate Cards
    • Corporate Payment Solutions
    • Corporate Purchasing Card
    AustraliaChange Country
  • Online Travel

    • Book Travel Online
    • Book Fine Hotels & Resorts
    • Book The Hotel Collection

    Travel Resources

    • Destination Guides
    • Travel Insurance
    • Using Your Card Overseas
    • Card Member Benefits
    • Find a Travel Service Office

    Business Travel

    • Global Business Travel Solutions
    • Small Business Travel
    • Foreign Exchange Services

    Travel Money

    • Travelers Cheques
    • Qantas Credit Cards
    • Travel Rewards Credit Cards
    AustraliaChange Country
  • All Insurance Services

    • Insurance Home Page
    • Insurance with your card
    • Other Insurance

    Travel Insurance

    • Travel Insurance
    • Multi-Trip/Annual Policy
    • Single Trip Policy
    AustraliaChange Country
  • Membership Rewards

    • Use Points for Gift Cards
    • Use Points for Travel
    • Rewards Changes

    Rewards Programs

    • Membership Rewards Cards
    • Qantas Frequent Flyer

    Card Member Offers & Benefits

    • Explore Card Benefits
    • Amex Experiences
    • Refer Friends. Earn Rewards
    AustraliaChange Country
  • Merchants

    • Merchant Home
    • Accept the Card
    • Manage Merchant Account
    • Contact Us and FAQs

    Corporations

    • Corporate Cards
    • Purchasing Solutions
    • Customer Centre
    • Global Business Travel Solutions
    • Meetings & Events
    • International Payments for Businesses

    Business Owners

    • Popular Small Business Cards
    • View All Small Business Cards
    • Manage Your Business
    • Business Credit vs Charge
    • How to Apply for a Business Card

    Global Network

    • Home
    • Issuers
    • Acquirers
    • Service Providers
    • Developers
    AustraliaChange Country
  • Contact Us
  • Log In
      • Your Account
      • Activate a New Card
      • Register for Online Services
      • Amex Mobile App Features
      • Add Someone to Your Account
      • Moving Abroad? Transfer Your Card
      • Your Account
      • Activate a New Card
      • Register for Online Services
      • Membership Rewards & Travel
      • Add Someone to Your Account
      • American Express @Work
      • Online Merchant Services
      • International Payments for Businesses
      • Support 24/7
      • View All Personal Cards
      • Learn About Credit Cards
      • The Platinum Card
      • The Qantas Ultimate Card
      • The Explorer Card
      • View all Business Cards
      • Popular Business Cards
      • Manage Your Business
      • View All Corporate Cards
      • Corporate Payment Solutions
      • Corporate Purchasing Card
      • Book Travel Online
      • Book Fine Hotels & Resorts
      • Book The Hotel Collection
      • Destination Guides
      • Travel Insurance
      • Using Your Card Overseas
      • Card Member Benefits
      • Find a Travel Service Office
      • Global Business Travel Solutions
      • Small Business Travel
      • Foreign Exchange Services
      • Travelers Cheques
      • Qantas Credit Cards
      • Travel Rewards Credit Cards
      • Insurance Home Page
      • Insurance with your card
      • Other Insurance
      • Travel Insurance
      • Multi-Trip/Annual Policy
      • Single Trip Policy
      • Use Points for Gift Cards
      • Use Points for Travel
      • Rewards Changes
      • Membership Rewards Cards
      • Qantas Frequent Flyer
      • Explore Card Benefits
      • Amex Experiences
      • Refer Friends. Earn Rewards
      • Merchant Home
      • Accept the Card
      • Manage Merchant Account
      • Contact Us and FAQs
      • Corporate Cards
      • Purchasing Solutions
      • Customer Centre
      • Global Business Travel Solutions
      • Meetings & Events
      • International Payments for Businesses
      • Popular Small Business Cards
      • View All Small Business Cards
      • Manage Your Business
      • Business Credit vs Charge
      • How to Apply for a Business Card
      • Home
      • Issuers
      • Acquirers
      • Service Providers
      • Developers
  • Contact Us
AustraliaChange Country
  • Card Accounts

    • Your Account
    • Activate a New Card
    • Register for Online Services
    • Amex Mobile App Features
    • Add Someone to Your Account
    • Moving Abroad? Transfer Your Card

    Business Owners

    • Your Account
    • Activate a New Card
    • Register for Online Services
    • Membership Rewards & Travel
    • Add Someone to Your Account

    Other Accounts

    • American Express @Work
    • Online Merchant Services
    • International Payments for Businesses

    Contact Us

    • Support 24/7
  • Personal Cards

    • View All Personal Cards
    • Learn About Credit Cards

    Popular Personal Cards

    • The Platinum Card
    • The Qantas Ultimate Card
    • The Explorer Card

    Cards for Business Owners

    • View all Business Cards
    • Popular Business Cards
    • Manage Your Business

    Corporate Cards

    • View All Corporate Cards
    • Corporate Payment Solutions
    • Corporate Purchasing Card
  • Online Travel

    • Book Travel Online
    • Book Fine Hotels & Resorts
    • Book The Hotel Collection

    Travel Resources

    • Destination Guides
    • Travel Insurance
    • Using Your Card Overseas
    • Card Member Benefits
    • Find a Travel Service Office

    Business Travel

    • Global Business Travel Solutions
    • Small Business Travel
    • Foreign Exchange Services

    Travel Money

    • Travelers Cheques
    • Qantas Credit Cards
    • Travel Rewards Credit Cards
  • All Insurance Services

    • Insurance Home Page
    • Insurance with your card
    • Other Insurance

    Travel Insurance

    • Travel Insurance
    • Multi-Trip/Annual Policy
    • Single Trip Policy
  • Membership Rewards

    • Use Points for Gift Cards
    • Use Points for Travel
    • Rewards Changes

    Rewards Programs

    • Membership Rewards Cards
    • Qantas Frequent Flyer

    Card Member Offers & Benefits

    • Explore Card Benefits
    • Amex Experiences
    • Refer Friends. Earn Rewards
  • Merchants

    • Merchant Home
    • Accept the Card
    • Manage Merchant Account
    • Contact Us and FAQs

    Corporations

    • Corporate Cards
    • Purchasing Solutions
    • Customer Centre
    • Global Business Travel Solutions
    • Meetings & Events
    • International Payments for Businesses

    Business Owners

    • Popular Small Business Cards
    • View All Small Business Cards
    • Manage Your Business
    • Business Credit vs Charge
    • How to Apply for a Business Card

    Global Network

    • Home
    • Issuers
    • Acquirers
    • Service Providers
    • Developers

AustraliaChange Country
Small Business Cards
Cards
American Express® Platinum Business Card
American Express® Qantas Business Rewards Card
American Express Business Explorer® Credit Card
View All Cards
Compare Cards
International Payments
International Payments
American Express AccessLine™
View All International Payments
Manage Your Business
Business Benefits
Why Amex for your Business?
Business Credit vs Charge
Business Rewards
Business Cash Flow Management
Business Travel Rewards
Existing Customers
Order Cards for Employees
Corporate Card Programs
Cards
American Express® Corporate Platinum Card
American Express® Qantas Corporate Platinum Card
American Express® Corporate Gold Card
View All Corporate Cards
Compare Corporate Cards
Payment Solutions
Buyer Initiated Payments
American Express vPayment™
View All Supplier Payments
International Payments
American Express AccessLine™
View All International Payments
Trend & Insights
Business Trends & Insights
Products & Solutions
Service & Expertise
Existing Customers
Trends & Insights
Trends & Insights
Insights and Inspiration to Help Grow Your Business
Security
Managing Supply Chain
Managing Data and Trends
Managing Risks
Growth
Expanding
Adapting to Change
Future Proofing
Funding
Managing Cash Flow
Financing
Becoming More Efficient
People
Leading My Team
Managing Talent
Collaborating
  • Trends and Insights
  • Funding
Business Class

20 January 2020

Andrew Banks' Tips on Business Financing

Andrew Banks' Tips on Business Financing

Twitter Icon
Facebook Icon
LinkedIn Icon
Andrew Banks

Summary

In this exclusive article on business financing, Andrew Banks explores creative ways to streamline your cash-flow and raise capital to expand your business.

Twitter Icon
Facebook Icon
LinkedIn Icon

Cash is known as the 'oxygen' of business life, but cash-flow is often cited by business owners as one of their biggest challenges.

Cash-flow problems can crop up – or be exacerbated – when business owners haven't thought about the 'rhythm' of how they spend their money, versus how they collect it.

The two key levers that let you better manage and respond to the rhythm of your business are the accelerator of marketing and expansion, versus the brake of collecting payments and paying debts.

Many business owners don't realise how much their own actions can control their cash-flow. Analysing your terms of business – the timing and method of payment and deliveries – may help you take control of your cash-flow. If you're able to change your approach by thinking about win-win solutions for your payment terms, you may find different arrangements to help reduce pain down the line.

One place you may want to start is looking into the terms you have in place with your suppliers. You might consider negotiating a compromise with suppliers who require up-front payments. For example: you may suggest to a supplier that if you place an order over a certain amount, that they will accept a 20 percent deposit, with the balance due in 30 days. Your supplier benefits because you place larger orders in return for additional cash-flow days.

Another option you might want to consider is to pay your supplier by credit card. Some credit cards offer up to 55 days interest-free.

Checking the payment terms you have with your customers is a great next step you may consider. Ask yourself, what can you do to help them pay on time? Perhaps you ask for a part-payment when they place an order. Or look at your business processes: does it take you a few days to issue an invoice? Shortening that invoice cycle may help.

Many industries have standard payment terms that most businesses take for granted – but you don't have to accept those if you can come up with a good reason for an alternative.

For example, when I Co-Founded recruitment firm Morgan & Banks, we did a huge amount of business in the temporary staff area. At one stage our temporary staff division hired out around 12,000 temporary staff, from CEOs and engineers to accountants, draftsmen and labour hire. Those 12,000 people turned up to work inside our customers' businesses – but on our payroll – each-and-every-day, turning over about $600 million in gross payroll revenue.

Normally in the industry, you would pay temporary staff weekly or fortnightly, and bill the clients monthly. This was a big impost on our cash-flow – but there was also a downside for many of our clients. Some of the biggest companies with 10,000 permanent staff might have more than 50 temps in at a time, and those temps sometimes rolled up to the business each day for months. Often it wasn't until the invoice came in that the client realised they didn't need some of these temps for as long as they were there, or that perhaps they now needed some temps with different skills.

We talked to clients and offered to invoice them weekly so they could keep track of who they had on the ground, and in what role.

That helped us improve our cash-flow because funds came in much faster – and it also helped our clients because they had better control over their spend.

Other strategies can include launching a joint venture with a supplier, so that you're not directly invested in doing things that cost you money. Sure, that might mean you hand over some of the revenue, but it also gives you the opportunity to grow more than you may have otherwise.

Look for ways to be creative with how you do business – question every process that may have an impact on cash-flow.

Tips to Raise Capital

Whether you plan to grow your market share, or an opportunity comes out of the blue, you don't want to miss out due to cash-flow restrictions. However, to respond quickly to fast-rising demand, you often need to raise money (called capital) quickly so that you can order more supplies and perhaps even fund new staff to respond.

The main decision when considering how to raise funds to grow your business, is whether to fund growth through debt or through equity.

Debt is money that you borrow against the business or against your own assets, while equity is where you sell part of your business to obtain the funds you need to expand.

Debt, when managed well, can work out to be cheaper than equity – you can never get your equity back. If you are growing a business and expect it to be successful, then equity may be more valuable as time goes on.

It's an important consideration for business owners. If you have reasonable business with reasonable debtors and reasonable assets, it may be wiser to use debt.

You may want to investigate managing your risk by securing the debt solely with business assets – a “non-recourse" debt.

It makes sense to get independent advice when you are considering these questions.

Always think creatively when you are looking to improve your business. Another consideration for growth, may be launching a joint venture. You may want to look for a company that's in a related area (but not directly competitive) and offer to share a percentage of revenue in a certain line of business in return for access to their customers. This strategy may save expenses or release the extra capital you need to grow.

Explore More Business Financing Articles

Twitter Icon
Facebook Icon
LinkedIn Icon
Want to Dig Deeper?

Get an American Express Card

  • Personal Cards
  • Credit Cards
  • Small Business Cards
  • Corporate Cards
  • Add Someone to Your Account

More Products & Services

  • Insurance
  • Accept the Card
  • Online Services
  • Book Travel
  • Business International Payments
  • Refer a Friend

Important Links

  • Frequently Asked Questions
  • Chip & PIN
  • ATM Locator
  • Accessibility
  • Safe and Secure

Company Information

  • About American Express
  • About American Express Australia
  • Careers
  • Contact Us
  • Site Map
  • Facebook
    • Personal Cards
    • Credit Cards
    • Small Business Cards
    • Corporate Cards
    • Add Someone to Your Account
    • Insurance
    • Accept the Card
    • Online Services
    • Book Travel
    • Business International Payments
    • Refer a Friend
    • Frequently Asked Questions
    • Chip & PIN
    • ATM Locator
    • Accessibility
    • Safe and Secure
    • About American Express
    • About American Express Australia
    • Careers
    • Contact Us
    • Site Map
    • Facebook

American Express
AustraliaChange Country
  • Connect with Amex on Facebook
  • Connect with Amex on Instagram
  • Tweet your questions to @AskAmex
  • Connect with Amex on LinkedIn
  • YouTube

  • Website Rules and Regulations
  • Trademarks
  • Privacy Statement
  • Security Alerts

Copyright © 2021 American Express Company