How to Make a Cash Call From My Shareholders

When a large company is need of cash there are several options for them to get the extra cash needed. One of these options is leaning on the company’s shareholders for that extra cash. The company must be a publicly-traded company in order for it to have shareholders, then the company can make a cash call to its shareholders for help.

1. Request an updated and current balance sheet from the companies accounting department. It will take a lot of calculations and reviews to determine the exact amount of money needed to get the company through this tough time.  Examine the receivables and determine how much money could possibly be collected in the next month.


2. Review the accounts payables and how much money will be paid out in the next month. Some payables may be negotiated and their terms pushed out a little bit in order to buy some time.


3. Understand that if the company produces a product, then the amount of raw material will have to be added into the equation. Try to determine how long it will take to turn that raw material into profit or a sellable product and make sure that amount is added into the receivables.


4. Subtract the total expected payables from the total expected receivables. This will give the amount of money that the company will be short. It is a good idea to add 20 percent to that total so that it will ensure there will be enough money.


5. Call and mail letters to the shareholders explaining the current situation and how much money will be needed. Include in the letter a copy of the balance sheet and how the amount of money needed was calculated.


6. Explore alternative options just in case the shareholders are not able to provide the amount of money needed. Having a plan B is always a good idea.