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Anna Langstrom is the Regional Director at EKN.

Many issuers face challenges with their liquidity, the pressures of which are no less than the volume of large orders and long repayment periods. This is how you can boost your cash flow in the short and long term.

This is how EKN can help you strengthen your company

There are many different ways to boost cash flow and improve liquidity. We at EKN work every day with export companies, and therefore we see the best tricks that these companies use, says Anna Langeström, regional director at EKN, the government agency with a mission to help Swedish export companies abroad.

Here are five ways to get better cash flow and avoid liquidity issues:

1. control

The first step is to create an overview of the company’s need for liquidity. It is also often a requirement on the part of the bank if you want to help them with financing.

Perform a cash flow analysis where you pass when revenues and expenses arise in the business process, when subcontractors are paid – and of course when financing may be needed.

2. Increase the operational credit of the bank with the help of EKN

A common way to strengthen liquidity is to enlist the help of a bank. However, it can sometimes be difficult to obtain operating credit from the bank, which needs collateral to be able to answer yes. Then EKN can help by issuing an operating credit guarantee.

– Operational credit guarantee means that at EKN we take on 50 percent of the bank’s risk, which makes it easier for the bank to say yes. Anna Langstrom explains that this opportunity is also available to companies that do not export themselves, but subcontract to export companies.

3. Sell your bills

When you sell your invoices, you typically receive 96-99 percent of the total invoice value within 24 hours.

– It can be a good solution, but be aware that you are also selling customer management and the right to any delays and collection fees. In other words, there is less control over how your customers are treated at the checkout stage, says Anna Långström.

It is also a fairly expensive way to improve liquidity.

Even if you receive 99 percent of the invoice value, it corresponds to 1 percent of the interest per month, if you have a 30-day payment period.

4. Rent instead of buy

Today, it’s common to rent out everything from cars and copiers to printers and machine equipment. The downside is that it’s often more expensive than buying equipment, but in return you don’t tie up capital or charge credit space in the same way. Rental payments can also be deducted directly, even if there are special VAT rules to take into account.

5. Shipping in advance

Let your customer be the lender. Getting the customer to pay up front, before production begins, is one option. Typically, a prepaying customer wants a guarantee provided by the bank and EKN can make this possible by covering 75 percent of the bank’s risk.

EKN has many solutions for export companies and subcontractors who need help with liquidity and financing.

This is how EKN can help you strengthen your company

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