Cash flow is the lifeblood of your business, but getting your company into a positive cash flow territory can be much easier said than done. Managing cash in and cash out of the business can be a daily struggle for many new business owners, and in many cases, the money coming in needs to immediately go back out, which can lead to cash deficits and cause strain in several areas of the business. Regular cash flow management is the best way to stay on top of this, but even with the best planning, small businesses can find themselves in a sticky situation. If your business needs cash fast, here are some options to consider.
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Fast Business Loans
Gone are the days of the bank being your only option when it comes to getting a business loan. Today, there are various alternative lenders offering short-term, fast turnaround loans that can be in your business bank account on the same day. You can borrow various amounts from just enough to maintain a positive cash flow to higher amounts if you need financing for a certain aspect of your business.
Collect Payments Due
If you’re paid by client invoices, leaving them unpaid for a long time can wreak havoc on your cash flow. Collecting any payments due could mean an injection of cash into your business if you are still waiting on invoices to be paid. Clients might need a friendly reminder that their payment is due, so don’t give up on chasing unpaid invoices. There are plenty of things that you can do to ensure that customers and clients pay on time, including shortening your payment terms or offering a reward for paying early.
Invoice Factoring
One option that you can turn to if you have invoices that have gone unpaid for a long time is invoice factoring. Using this option, you will sell your invoices or any other accounts receivable to a factoring firm, who pays you for them upfront minus a fee, providing you with immediate cash in the bank. It’s then the responsibility of the factoring firm to chase the unpaid invoices.
Business Credit Cards
A business credit card can be an ideal way to build your company’s credit rating and provide quick access to cash when you need it. Business credit cards are often much easier to obtain compared to business loans and provide you with an ongoing line of credit that can quickly be utilized if your business experiences a cash flow emergency.
Slow Your Payments
Take a look at the terms that your vendors offer and see if there are any opportunities to slow your own due payments. For example, if a vendor offers 30-day payment terms, it’s worth taking advantage of this and making your payment closer to the end of that period in order to reduce a potential cash deficit. This allows you to successfully pay on time while still keeping as much of your cash for as long as possible.
Cash flow problems are something that many small businesses will encounter at some point. Thankfully, there are several solutions to consider if you need access to cash quickly.
