One of the greatest mistakes that small businesses make is not realizing the importance of cash for the day-to-day functioning of their company. Your lease needs to be paid on time, your supplier will expect payment on the agreed upon date and your employees couldn’t care less if you have a ton of accounts receivable, they want to be paid. In order not to allow your company to suffer due to these issues, you need to resolve the problem surrounding your cash flow as quickly as possible, so, here are five ways to provide your business with a quick influx of capital.
1. Sell your accounts receivable
In the introduction, we mentioned that you may have some account receivables that you hope to collect in the future, but, unfortunately, you may not have the luxury of time to actually wait for them. In order to prevent this from becoming a serious issue, you might want to sell some of these invoices to a factoring company and get cash in return. The long-term loss you will face here won’t exceed a few percent of the invoices’ total value, which might be a tolerable figure, given your circumstances.
2. Get a personal loan
Sometimes you will know that a certain situation is just a temporary setback, which is why you might be able to fix all your problems with a moderate sum. This is what prevents most people from turning to loans:, believing that indebting themselves might be a bad decision in the long-run. On the other hand, some personal cash loans specialize in these situations. Namely, they are willing to offer loans anywhere from $500 to $5,000 even to people with no collateral or a bad credit history. In other words, these bad credit personal loans might be just the temporary solution you were looking for.
3. Hire an accountant
Another thing you need to keep in mind is that sometimes, the financial problem you have goes far deeper than an string of unfortunate events. Sometimes, the money leak is caused by a flaw in your business structure or in-house theft. The best way to see if any of these issues are the real cause is to hire a professional accountant and have them look into it. This is especially important due to the fact that if this problem isn’t discovered in time, you stand to lose a fortune in years to come (provided your company survives that long).
4. Austerity measures
No matter how unlikely this piece of advice may sound, the problem with your cash flow might lie in the fact that you are spending more than you can afford to (or at least have to). If this is the case, your financial problems can be solved with a bit of austerity. Look for a different supplier, renegotiate some of your old deals and try to introduce a stricter policy of austerity concerning your office supplies. You might be surprised just how much can be saved this way.
5. Sell an asset
Finally, if nothing else seems to be working, you can always sell a personal asset. Selling your sports car and settling for something a bit less luxurious might benefit your business in the long-run. The same goes for selling a rental property or some of your jewelry, depending on what kind of assets you have and how much money you currently need. Look at it this way: you can always buy them back if your business becomes profitable once again.
At the end of the day, each of these methods has its own benefits and downsides. This is why it all comes down to your personal preferences and the specific situation your business is in. If you don’t have any assets or accounts receivable, you might be forced to take out a loan. On the other hand, hiring an accountant and trying to be a bit more frugal is always a positive thing. Either way, it is best to know all your options before you make up your mind.