Leveraging Your Business's Cash

Leveraging your cash is crucial to the success of your business. To determine where to put your cash, first look at how you plan to use it: for day-to-day operating expenses, short-term cash flow needs or long-term investments. You can develop strategies for seasonal fluctuations in sales or unexpected surges in company growth.

 

The following chart outlines various ways you can keep your money working for you.

 

Operating

(<30 days)

Short-term

(1 month to 1 year)

Long-term

(>1 year)

·         Money market funds

·         Tax-exempt money market funds

·         Treasury bills

·         Certificates of deposit

·         Commercial paper

·         Variable-rate preferreds

·         Variable-rate demand obligations

·         Corporate notes and bonds

·         Mutual funds

·         Treasury notes

·         Agency notes

·         Preferred stock

·         Managed accounts

 

For a current prospectus of Merrill Lynch money funds, which contains more complete information, please call your Financial Advisor. Before investing, consider the investment objectives, risks, and charges and expenses of the fund. This information may be found in the fund’s prospectus. Read the prospectus carefully before investing. Investments in money market funds are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the funds seek to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the funds.

 

If your goal is to enhance the return on capital you don’t need immediately, consider these options:

 

Extend the maturities of your cash investments

Even switching from 30-day to 60- or 90-day investments can make a significant difference in yield. And if your company’s profits put it in one of the higher corporate tax brackets, you could make use of such tax-advantaged instruments as tax-exempt money market funds, variable-rate demand notes and municipal notes.

 

Invest in high-quality corporate money market investments

These have a high degree of safety and generally offer a better yield than U.S. Treasury securities, but do not have the credit quality of U.S.-backed bonds.

 

Take advantage of institutional investment vehicles

These may be practical if you have $100,000 or more to invest. These vehicles require high minimums but generally offer better yields.

 

Remember that all investments have risks, and a higher yield generally equates with increased market risk. Your Merrill Lynch Business Financial Advisor will work closely with you to analyze your company’s cash position and help you select investments suited to your time horizon, liquidity needs and acceptable levels of risk.

For more information call 1.866.4ML-BUSINESS (465-2874) or e-mail us at AskMLBiz@ml.com.

Merrill Lynch, Pierce, Fenner & Smith Incorporated is a registered broker-dealer, not a bank, and the WCMA account is not a bank account. Banking services are provided by licensed banks or by third parties through arrangements with licensed banks. Unless otherwise indicated, investment products are not FDIC-insured, not guaranteed by a bank and may lose value.

Working Capital Management Account and WCMA are registered service marks of Merrill Lynch & Co., Inc.

Merrill Lynch, Pierce, Fenner & Smith Incorporated is a registered broker-dealer, not a bank, and the WCMA account is a brokerage account, not a bank account.  Banking services are provided by licensed banks or third parties through arrangements with licensed banks.  Unless otherwise indicated, investment products are not FDIC-insured, not guaranteed by any bank and may lose value. 

Business Investor Account and BIA are service marks of Merrill Lynch & Co., Inc.


The Business Investor Account is a product of Merrill Lynch, Pierce, Fenner & Smith Incorporated, which is a registered broker-dealer, not a bank, and the BIA account in not a bank account.  Banking services are provided through licensed banks or by third parties through arrangements with licensed banks.  Securities, mutual funds and other non-deposit investment products available through the account are not FDIC-insured, not guaranteed by a bank and may lose value. 

Financing, including the WCMA Reducing Revolver loan, is through Merrill Lynch Commercial Finance Corp., 222 North LaSalle Street, 17th Floor, Chicago IL 60601-California Loans made pursuant to a Department of Corporations California Finance Lenders license.  Programs, options and property types are not available in all states and are subject to change.  Certain conditions, restriction and costs may apply, Not all features are available with all programs.  All loans are subject to credit review and approval.  

 


 


 

Related Products and Services

Working Capital Management Brokerage Account® (WCMA® Account)

  • The Working Capital Management Brokerage Account® (WCMA® account) combines cash management and investing in a single account. As funds flow into and out of your WCMA® account, they are automatically applied where they are needed for optimum efficiency.

Business Investor AccountSM (BIA)SM

  • The Business Investor Account is for businesses who want the flexibility and convenience of an investment account with some cash management features, including an automatic sweep of cash balances.  The BIA account offers you access to a broad array of short-, mid- and long-term taxable and tax-advantaged investment vehicles.

Investing Options