How to Find Flexible Financing Options for Your Business

by Team Dinks on May 12, 2015 · 0 comments

If your business is struggling, your first priority is to prevent a cash flow heart attack. Even the best schemes to boost your profit margins and supercharge your sales won’t save you if you can’t keep day-to-day operations flowing. You must pay your vendors and your staff to keep things running, even if there’s no revenue coming in the door. But if your business is struggling, how can you raise the cash you need? It may seem impossible, but a number of options are available.

Finance Major Purchases

flexible financing

Image via Flickr by Lending Memo

The last thing you want to do at this time is hand over a large amount of cash for a major purchase. If you need equipment or furnishings, do everything in your power to finance those. It will be easier to get funding from your supplier, or even from your bank, to finance assets than to fund your general operations.

Seek Alternative Lenders

Banks are famous for only lending you money if you can prove you don’t need it. Odds are your credit score has taken a hit.  So where can you turn when you’re being squeezed by cash flow problems? There are lenders who are willing to work with higher-risk clients, by offering bad credit business loans. Like any business, they’ll expect to balance risk and reward, so you’ll be paying a higher rate. But if you’re sure your business can turn the corner, your own return on the investment should make it worthwhile.

Borrow Against Your Receivables

Are your cash flow problems caused by slow-paying customers? It seems the bigger your clients are, the more likely they are to drag their feet when it comes time to honor the payment terms of their contract. If you’re waiting for payment for sales you’ve already made, it might be possible to borrow against those accounts. Gather up your client list and your accounts receivable figures and take them to your lender.

Borrow Against Your Contracts

Sometimes businesses struggle because they’re in a growth spurt. Signing on new customers means committing resources to produce whatever product or service they need — usually long before you can send an invoice, much less collect payment. If you’ve recently signed a solid new customer or two, take those contracts with you to your lender.

Ask Your Vendors For Financing

Do you have one or more vendors who make up the bulk of your expenses? It’s possible you’re just as important to them as they are to you. Arrange to  talk to them about your situation in person. Let them know you need more lenient terms, or ask them for time to pay off your past due balance. If you’re a major customer, most vendors will work with you, even if they’re reluctant at first. They’d rather accept longer payment terms than lose a customer.

Business loans from your local bank are very useful for initial funding, and for cash injections when things are going well. But when you’re struggling, it’s time to get creative with your financing.

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