Comparing Cash Flow and Profit: What They Are and Why They're Important

Share this article:
Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
What Is Cash Flow & How Does It Work?
What Is Profit & How Does It Work?
Gross profit Net profit
Gross Profit
Materials: $300 Shipping: $100 Labor: $200 Overhead: $300
Net Profit
Cash Flow vs. Profit
Similarities
Differences
Cash Flow vs. Profit in Accounting
Cash Basis Accounting
Accrual Accounting
The Takeaway
3 Small Business Loan Tips
Generally, it can be easier for entrepreneurs starting out to qualify for a loan from an online lender than from a traditional lender. Lantern by SoFi’s single application makes it easy to find and compare small business loan offers from multiple lenders. Traditionally, lenders like to see a business that’s at least two years old when considering a small business loan. If you need to borrow money to cover seasonal cash flow fluctuations, a business line of credit, rather than a term loan, provides the flexibility you likely need.
Frequently Asked Questions
SOLC0122029
About the Author
Su Guillory is a freelance business writer and expat coach. She’s written several business books and has been published on sites including Forbes, AllBusiness, and SoFi. She writes about business and personal credit, financial strategies, loans, and credit cards.
Share this article: