March '20

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rv-pro.com March 2020 • RV PRO • 105 Profit doesn't equate to cash flow because ... cash flow and profit are not the same. There are many factors that make up cash flow, such as inventory, taxes, expenses, accounts payment and accounts receivable. Cash-Flow Loans Cash-flow-based loans rely on the value of the operation's cash flow. If the opera- tion has a strong cash flow stream, it can be used to get significant loan amounts even if there are few business assets. Although cash-flow loans can be expensive, they play a key role in a business that is expanding. An advantage of cash-flow loans is the repayment period. These loans are usually designed according to the needs of the borrower with repayment period usually between five and seven years. And, given that cash flow loans are different from asset-based loans, rarely does collateral have to be put up. Flowing Cash Flows Assessing the amounts, timing and uncertainty of cash flow is the most basic objective of cash-flow management. Positive cash flow indicates the liquid assets of the RV business are increasing, enabling it to settle debts, reinvest in its business, return money to shareholders, pay expenses and provide a buffer against unanticipated finan- cial challenges. The impact of a negative cash flow can be profound with so many operating on margins so thin that frequent lost opportunities will put them on the path to closing their doors. Every business can improve its cash- flow. Of course, in order for this to happen, it needs to adopt best practices in the way they invoices, follows up with customers and, monitors outflow. Without the help of a qualified professional, these best cash-flow practices may be more difficult to achieve. For more information, contact Kurt Harbeke at 800.579.2233 x4213 or kharbeke@agwsinc.com. American Guardian Warranty Services, Inc. is Part of the American Guardian Group of Companies. 800.579.2233 | agws.com DRIVE YOUR BUSINESS WITH AGWS is an innovative provider of administration services for Dealers and Marketers offering vehicle service contracts, limited warranties, and a variety of environmental and aftermarket products. AGWS can supply you with cutting edge technology, great customer service, fast handling of claims, F&I/Compliance training, reinsurance, and so much more. Contact us to learn more: agws.com/ContactUs F&I Products • Capital Advance Program • Technology • Training • Administration

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