Alternative Short Term Credit

The Pros and Cons of Different Sources of Working Capital

Mid-sized companies are struggling to find the short term credit they need to maintain cash flow and grow their businesses. Whether it’s filling a big customer order with a factory in Mainland China or importing the products you need to keep your retail business at full capacity, short term credit is crucial to business.

Summary:

  • Tight lending market has created cash-flow problems for Hong Kong companies
  • There are many alternative sources of working capital, each with unique benefits and costs
  • American Express Corporate Card Programme offer up to 51 days of interest-free credit
Alternative Short Term Credit

Cash-flow is regularly undermined by common business challenges, such as outstanding and overdue invoices or inefficient and costly payment systems. However, most businesses will cite Hong Kong’s tight bank-lending market when they talk about their cash flow woes. For many mid-sized businesses, obtaining a bank loan remains difficult, costly and time-consuming. The regular forms of short-term credit, such unsecured loans, asset-conversion, revolving lines of credit, bridge and term financing have all become harder to obtain.

Recent years have seen a wave of efficiency enhancements among Hong Kong businesses as they scramble to improve cash flow. These include trimming operating costs, chasing late payments and negotiating new payment terms with vendors.

Their next avenue of help is alternative sources of working capital, all of which come with benefits and draw backs. Here’s a breakdown of the options available to businesses who need more working capital. Download the full table to understand the detailed pros and cons of each options available.

Alternative Short Term Credit Table

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American Express Corporate Card programme are an accessible and affordable option for many mid-sized businesses, and one of the top choices following commercial bank financing.

Our corporate cards allow a business to pay the vendor immediately, thereby strengthening supplier relationships, but still enjoy up to 30 days of interest-free credit until the monthly statement comes due. Cards are a great way to increase cash flow without affecting supplier relationships.

Using American Express offers the added bonus of generous reward programmes, meaning you earn valuable rewards for every dollar your business spends. These rewards can benefit your travel and entertainment or the rewards can be redeemed to reduce other office costs.

Our commercial payment solutions also improve the efficiency of payment and approval processing, offering greater visibility and tracking of your business expenditures. Corporate cards can also provide financial managers with tighter control over orders and staff spending.

Contact us for more information on how your business can benefit from using American Express as an alternative source of short term credit.