owners of long cash conversion businesses are finding alternative funding solutions such as invoice finance are allowing them to execute strategic growth plans, and they are thriving as a result.

An immediate transfer of cash into the business bank account as soon as an invoice is raised is gratifying to see, and is allowing entrepreneurial managers to focus on expanding their teams and smashing their sales targets rather than worrying about cash flow.

This type of funding is particularly suitable for businesses that have significant delays between paying vendors and and receiving customer payments, including businesses that buy commodities as manufacturing materials.

The reliable cash flow injection from an alternative approach holds much less risk than traditional methods of funding as the only money borrowed is already owed to the business. The steady stream of liquidity helps to maintain a consistently healthy bank balance.

What is Cash Conversion Cycle? The cash conversion cycle is a metric used to gauge the effectiveness of a company’s management and, consequently, the overall health of that company. The calculation measures how fast a company can convert cash on hand into inventory and accounts payable, through sales and accounts receivable, and then back into cash.

Learn more about Defoe Redmount capital solutions for businesses.