It’s tough for businesses to survive without regular cash flow. Some businesses are fortunate to receive the consistent cash flow, whereas a lot of businesses would benefit from a cash boost to help ease common pressures such as downtime, slow payers – or conversely to enable the realization of an opportunity.
In this article, we’ll take a look at some ways you can find that extra money that could benefit your business.
- Obtain a Loan From Someone You Know
Borrowing money from a friend or family member is often the first place that small businesses go when they need a helping hand. That said, it’s critical to document all terms of the arrangement prior to proceeding with the loan to ensure you don’t have a fallout about the details later down the track. It’s important to agree on whether your friend or family member expects interest to be added to the loan, the duration of the loan, and the repayment schedule (i.e. how much, how often, and when they expect to be paid back). You should also discuss what the plan is should you be delayed in your repayment schedule, or not able to repay the loan in the time agreed. Expect that most personal lenders will expect some type of kick-back for their help.
- Is There An Asset You Can Liquidate?
Liquidating, or selling an asset, is often one of the fastest ways to give your business a boost and the cash injection it needs. This could be through selling personal assets or a business asset that you no longer use or can do without for a while. Common assets include vehicles, equipment, furniture, or even real estate. You might find you need to sell off a number of different items to accumulate the money required, but there’s usually something that can be offloaded.
- Find An Investor
Securing an investor in your business is a common way of injecting a lump sum of cash into your operation, to either expand it or simply keep it afloat. Be aware though that investors will expect a share of the profits, and they may want to take an active role in the business.
- Short Term Loans For Small Businesses and Investors
Short-term business loans are another option to consider.
With a short-term business loan, you can borrow funds to address a variety of different circumstances. Accordingly, businesses often have different requirements at different times of the year, which are highly influenced by the industry sector. For instance, retail and hospitality often seek funding ahead of the holiday period to purchase stock in advance, as well as pay staff over the busy period. Similarly, businesses may benefit from new equipment or technology that may help operational efficiencies or enhance outputs (i.e. the volume of goods manufactured) to coincide with peak periods. Short-term business loans are often used to help consolidate debts, such as ATO and other business debts, or equally also used to expand operations through the acquisition of a new business or premise.
Independently of their use, short-term business loans are becoming increasingly popular as they’re quick to process – so quick that funding can often be obtained in a few days. Short-term business loans typically only require minimal paperwork, which makes them easy to apply for, and are usually available for a 3 to 12-month period.
There are also a number of lenders that provide short-term loans, ranging from traditional institutions, such as banks and building societies, through to an increasing number of private lenders (which are usually funded by a pool of private investors’ money). The upside of private lenders is that they have far greater control over the loan amount and terms able to be offered. As such, they are renowned for being very flexible with the borrowers they help, as well as the types of loans they write.
- Do You Have Any Debts You Can Call In?
Does anyone owe you money that they haven’t yet paid? This could be a personal debt or a business debt, but if you’re owed money, if you can get that debt repaid to you, it just might solve your immediate cash flow dilemma.