Our aim is to ensure you are financially equipped to handle any situation that comes your way. Talk to an eCapital expert for fast, flexible financing solutions to restore your business’ working capital in under 48 hours.
See how we can help your business
See how we can help your business
PREPARE YOUR BUSINESS FOR THE UNEXPECTED
Unexpected expenses can derail any business’ best-laid plans and can strike any business, anywhere, at any moment.
A promising opportunity may emerge, economic or market conditions may fluctuate, or a sudden legal issue may arise. Regardless of the situation, positive or negative, your financial readiness may be caught off guard.
Trust eCapital to be your catalyst for success when your business faces unexpected situations. We’re your starting point for immediate, short-term financing.
of small businesses have less than 3 month's worth of cash reserves
of business owners say they couldn't access funding if they needed additional capital
LEVERAGE OUR FAST & FLEXIBLE SOLUTIONS
Every business has its challenges. Successful business leaders focus on what they can control: their strategy, growth plans, efficiency and customer satisfaction.
But even with all the right pieces in place, unexpected events can happen.
Are you dealing with unexpected or urgent equipment
Is there a chance for you to undertake an exceptionally sizable
project or order?
Do you have plans to establish a new branch or venture into a new business area that necessitates a substantial initial investment?
Has a large customer defaulted on their debt to you?
Has your business experienced a sudden boost in clients?
Any of these events could end up a missed opportunity or even worse, cause harm to your business. The solution is a fast and flexible bridging loan, available when you need it, on terms that work for you.
HOW PREPARED IS YOUR BUSINESS FOR
Cash on hand consists of finances set aside expressly for an unexpected use—this could be rainy day funds for an emergency or money to put toward unanticipated investment or expansion opportunities.
Cash on hand is just an expression; it’s a term for how much of a cash buffer your business has access to. You can approximate your business’ liquidity using formulas and financial ratios such as the current ratio.
Paying attention to the current ratio allows you to handle issues quickly as they arise.
The current ratio shows how many times your business’ current or liquid assets can cover its short-term debt or unexpected events.
A current ratio of 1.2 to 1 or higher generally provides a strong enough cushion to weather unexpected events. A current ratio that is lower than the industry average may indicate a higher risk of distress or default.
In times of economic uncertainty, most businesses prefer a higher current ratio of 2 to 1 or 3 to 1.
Leveraging eCapital’s creative financing solutions will allow you to quickly improve your current ratio and better prepare your business for unexpected events.
OUR UNEXPECTED EVENTS FINANCING SOLUTIONS
Every organization has resources that can be leveraged to create working capital. Through our growing suite of financial products, we can provide the right solution to meet their capital needs head on.
Increasing cash on hand can be achieved through several strategies. Firstly, you can improve your revenue by increasing sales, raising prices, or introducing new products or services. Secondly, you can reduce expenses by cutting non-essential costs, negotiating better deals with suppliers, or improving operational efficiency. Additionally, you can speed up cash inflow by improving your invoicing and collection processes, offering incentives for early payments, or using factoring services. Lastly, consider securing financing like a line of credit or a loan, or selling non-essential assets.
The average amount of cash on hand for businesses can vary widely based on several factors including the size of the business, the industry in which it operates, the business’s stage of growth, and current economic conditions.
As a general rule, many businesses aim to keep enough cash on hand to cover at least three to six months’ worth of operating expenses. This is considered a safe amount that allows the business to continue operations even in the event of an unexpected downturn or expense.
However, startups or companies in growth stages might maintain more cash to fund new investments, whereas mature companies might hold less as they could have steady cash flows. In some industries like technology or biotech, companies might have even larger cash reserves due to the high levels of uncertainty and investment requirements.
The cash flow statement provides a detailed summary of how a company’s cash position changes over a specified period due to its operating, investing, and financing activities. To calculate the available cash at the end of a given period from a cash flow statement, follow these steps:
Identify the starting cash balance: This is usually found at the top of the cash flow statement and represents the cash balance at the beginning of the period.
Calculate net cash from operating activities: This section includes cash inflows and outflows related to the company’s primary business operations like selling goods, providing services, paying salaries, and other day-to-day expenses.
Calculate net cash from investing activities: This section includes cash flows associated with the purchase and sale of long-term assets like property, plant, and equipment, and investments in other businesses.
Calculate net cash from financing activities: This section includes cash flows from issuing or repaying debt, issuing or repurchasing equity, and paying dividends.
Add/Subtract the net cash from each of these sections (operating, investing, financing) to the starting cash balance.
The result will be the ending cash balance, which is the available cash at the end of the period.
So, the formula would look like this:
Ending Cash Balance (Available Cash) = Starting Cash Balance + Net Cash from Operating Activities + Net Cash from Investing Activities + Net Cash from Financing Activities
Remember, while this calculation gives you the cash available at the end of the period, it’s also essential to understand the nature of these cash flows. Some cash inflows or outflows may be one-time events or might not be sustainable in the long term.
“Cash on hand” refers to the amount of money that a company has readily available at any given moment. This can include physical cash stored in a safe or a cash register, as well as the funds available in bank accounts, like checking accounts or highly liquid savings accounts. It represents the most liquid form of assets a company possesses and can be used immediately to meet any short-term obligations or unexpected costs.
In a broader sense, “cash on hand” also refers to a company’s ability to cover its current liabilities.