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Friday, July 26, 2024 12:34:56 PM
Understanding Cash Flow Financing
If a company is generating positive cash flow, it means the company generates enough cash from revenue to meet its financial obligations. Banks and creditors analyze a company's positive cash flow as a means of determining how much credit to extend to a company. Cash flow loans can be either short term or long term.
Cash flow financing can be used by companies seeking to fund their operations or acquire another company or other major purchase. Companies are essentially borrowing from a portion of their future cash flows that they expect to generate. Banks or creditors, in turn, create a payment schedule based on the company's projected future cash flows as well as an analysis of historical cash flows.
After 5 years of increasing losses... well... discussions of cash flow financing are ignorant and the punchline to a joke!
https://www.investopedia.com/terms/c/cash-flow-financing.asp
