What is one method businesses can use to increase their cash amount?

One effective method for businesses to increase their cash amount is through sales and leaseback arrangements. In this process, a company sells an asset, such as property or equipment, to another party and simultaneously leases it back for continued use. This approach generates immediate cash for the business because it converts a fixed asset into liquid funds, which can then be utilized for various operational needs, including paying off debts or investing in growth opportunities.

The advantage of sales and leaseback is that it allows businesses to maintain operational usage of the asset while enhancing their cash flow. This can be particularly beneficial during times when liquidity is crucial for sustaining day-to-day operations or for pursuing strategic initiatives.

This method stands out as it not only boosts cash reserves but can also improve financial flexibility for future investments or unforeseen expenses.