Cash flow funding is the process of acquiring extra financial resources in order to make it easier to handle immediate overhead expenses. In many situations, this would indicate that an individual was seeking a means to refinance a piece of property or equipment, but it could also relate to selling off excess merchandise, trading stock options, or any other means of liquidation in order to acquire cash. While cash flow funding is normally used when discussing businesses, it would also be perfectly valid in describing personal finances as well.
An example of cash flow funding could be found in any average person that has enough income to handle the normal monthly expenses without issue. Financially speaking, everything may be perfectly fine for that person until an unexpected change occurs, and it could be a medical emergency, a repair cost, or any setback that places him in a position where paying bills would become difficult. In order to meet all monthly expenses, a cash flow funding option is inevitable, and that person would seek an extra influx of money by whatever means possible.
The most common form of cash flow funding comes from refinancing a home or vehicle through a lending institution. If the individual in question has a steady stream of income available, but can not meet a newly discovered one-time expense, there is a good chance that a bank would set up a short-term repayment plan as long as he qualifies financially. Other times, businesses with cash flow funding problems will apply for a consolidation loan in order to combine several different outstanding debts into a single payment, which often can save several thousands of US Dollars (USD) per month. Homeowners with cash flow funding issues will go through the exact same procedures to eliminate vehicle loans, medical bills, or credit card debt, especially when interest rates on housing are low.
Other forms of cash flow funding may include selling off excess real estate, business equipment, stock portfolios, or any other commodity that holds value. These options are often sought when refinancing is not an option because of poor credit or a number of other factors, and it is sometimes also a sign that the income levels are not sustainable. In these types of situations, the most common type of cash flow funding would be reducing overall debts and monthly expenses, often at a sacrifice of the quality of living.
