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| Net Operating Cash Flow (NOCF) | Debt Service Coverage Ratio (DSCR) | Cash Conversion Cycle (CCC) | Free Cash Flow (FCF) |
|---|---|---|---|
| This is the term lenders use to describe the cash your company generates from core operations, not including financing or investments. Consistently positive NOCF shows that your company is strong, can manage expenses, and has efficient income sources. | This ratio measures your operating income against your total debt payments (How much income comes in vs how much money is spent to cover debt obligations) Most lenders require a DSCR above 1.25, which means your company earns 25% more than current debt obligations. | This is essentially your inventory or sales cycle – CCC measures how long it takes to convert resources into cash flow through your channels. Shorter CCCs mean it takes less time to convert resources to cash, which is what lenders are looking for. | FCF is how much cash your business has on hand after its capital expenditures. It’s essentially a measure of your liquidity. Lenders see FCF as financial flexibility and growth capability. Companies with an abundance of cash on hand are flexible in their investments and have a safety net. |
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Lorem ipsum...Explore Capital Options with National Business Capital
As we look ahead to the opportunities to come from this shifting economic landscape, now is the time to position your business for growth. Those with growth plans should explore their capital options sooner rather than later, and there’s no better way to do that than working with National Business Capital’s expert advisory team. Clients work with a dedicated advisor to personalize their capital options to their unique needs. Our flexible direct lending criteria paves the way for higher approvals and unique terms, while our diverse arsenal of financing products ensures every company can find the option they need to grow and scale. Take advantage of the economic shift before your competition does. Complete our digital application today, and an expert advisor will reach out to you shortly after. Disclaimer: The information and insights in this article are provided for informational purposes only, and do not constitute financial, legal, tax, business or personal advice from National Business Capital and the author. Do not rely on this information as advice and please consult with your financial advisor, accountant and/or attorney before making any decisions. If you rely solely on this information it is at your own risk. The information is true and accurate to the best of our knowledge, but there may be errors, omissions, or mistakes.ABOUT THE AUTHOR
Joe Camberato is the CEO and Founder of National Business Capital. Beginning in 2007 out of a spare bedroom, Joe and his team have financed $2+ billion for businesses nationwide. He’s made it his calling to deliver the educational and financial resources businesses need to thrive.
