Investing corporate cash: strategies and opportunities

Investing your company's cash flow is an essential strategic step in optimizing the profitability of available liquid assets. All too often, these funds remain tied up in current accounts or low-interest investments, when they could generate attractive returns while respecting the security and availability constraints specific to each company. In this article, we explore different investment solutions for corporate cash management.

Why invest your company's cash flow?

A company's surplus cash represents unused short-term funds. Rather than leaving it idle, you can make it grow by investing it wisely. There are several advantages to this approach:

• Optimizing returns: Business current accounts generally earn no interest, whereas suitable investments can generate significant income.
• Preserving purchasing power: In a period of inflation, not investing means seeing the real value of your cash diminish.
• Risk diversification: Placing cash in several different vehicles reduces the risks associated with fluctuations in a single type of investment.

Investment selection criteria

Before choosing an investment strategy, it's crucial to assess the company's needs and constraints:

• Liquidity: The ability to recover funds quickly if necessary.
• Security: Minimize the risk of capital loss.
• Profitability: Maximize potential gains according to the level of risk accepted.
• Investment horizon: The length of time funds can be tied up.

The right investment solutions

1. Term accounts and company passbooks
   

   These investments offer maximum security and reasonable liquidity, with fixed interest rates that are often modest. They are well suited to risk-averse companies, but offer limited returns.

2. Corporate and government bonds

   Investing in bonds allows you to lend funds in exchange for regular interest payments. Risk varies according to the strength of the issuer, but highly rated bonds offer a good compromise between security and profitability.

3. UCITS (Undertakings for Collective Investment in Transferable Securities)

   These funds enable diversified investment in equities, bonds or money market products. They offer varying levels of risk and return depending on their strategy.

4. Real estate crowdfunding

   The real estate crowdfunding is an innovative and increasingly popular solution for investing corporate cash flow. It involves collectively financing real estate projects via specialized platforms. This type of investment offers several advantages:

• • Attractive returns: Real estate projects financed via crowdfunding often offer rates of return in excess of 5% annually.
  • A defined investment horizon: Funds are generally locked in for a period of 12 to 36 months, depending on the project.
  • Accessible diversification: relatively modest amounts can be invested in several projects to spread risk.

However, real estate crowdfunding also involves risks These include the creditworthiness of the developer, delivery times and fluctuations in the real estate market. It is therefore essential to select the right projects.

5. Unit-linked life insurance

   Some life insurance policies tailored to the needs of businesses allow you to invest in unit-linked products, offering the potential for high returns with controlled risk. This type of investment can also be tax-advantaged.

6. SCPI (Sociétés Civiles de Placement Immobilier) real estate investment trusts
   

   Investing in SCPIs enables you to indirectly acquire shares in rental properties. This investment offers regular returns and asset diversification, but liquidity can be limited.

Conclusion

Investing in corporate cash flow requires a rigorous analysis of the company's needs and constraints. Real estate crowdfunding, with its attractive returns and accessible diversification, is a particularly attractive option among other solutions such as SCPIs, bonds or term accounts. A well thought-out investment strategy not only preserves cash value, but also actively contributes to the company's growth and financial strength.