A business loan is not the only way to add cash flow to your small business. You may have to make some difficult decisions and get creative about how to increase your cash flow to keep your company open when sales get slow.
If you invoice customers, you can set a transaction limit for invoicing. Not only does this get you your money up front on smaller sales, but it saves time and money for invoicing and collecting payments. You could even offer a small discount for pre-payment. You could offer larger customers who make large purchases the same discount if they pay within a quicker time frame.
If you are a mobile company that works offsite, find a way to accept mobile payments from credit cards. Make your smartphone work even harder for you. Utilize all of the technology that is available to you. When you go to vendor shows, you need to be able to accept payments on-site. You can set up direct deposit for customers to pay you more efficiently. Don’t forget to check around for the best rates to accept credit card payments.
Look at your business and budget. Where can you reduce costs or find ways to save money? You may want to renegotiate regular monthly costs or shop around for better deals. Search out customers who haven’t purchased from you recently. Give your sales team incentives for increasing their sales base. It could benefit you to check credit references of your customers to ensure their ability to pay. This is when your accounting software will benefit you by giving you detailed information about your expenditures and where you are losing money.
Sell your receivables to get immediate cash flow without taking on more debt. A merchant cash advance or factoring will give you a boost of cash immediately. Which one you choose will depend on your type of business, and you should fully explore the long term ramifications of selling your receivables. This is a very viable option for businesses who need immediate cash and do not want to ask a bank for a loan. Make sure you work with a reputable company who is up front about their contract and costs associated with the process.
If your business is having a cash flow problem, there are solutions that you can tap into. Factoring and merchant cash advances get you money in a very short time to manage immediate needs. By combining many different ways to increase cash flow, you can weather the storm and be more prepared for the next slump that happens.