All businesses go through ups and downs, so there will be times when you need additional funding. By obtaining financing from the right source, you can access the cash you need to keep your company afloat and avoid overburdening the business in the long-term.
When you need funding quickly, however, it can be hard to know where to turn. Government-backed and commercial loans may have long approval times, which means you won’t be able to access the funds as quickly as you need to. Fortunately, there are other ways to access speedy funding for your firm.
To get the financial support you need in place quickly, take a look at these fast cash flow solutions for struggling businesses:
1. Sell Your Shares
If you own the business outright, you could access a significant amount of money by selling some of your shares. Providing you retain at least 51% of the company, you’ll still be the majority shareholder, which means you’ll still have the casting vote when decisions need to be made.
However, you may have a limited pool of buyers if you want to sell your shares quickly. Furthermore, deciding to sell part of your company requires careful consideration, so it’s always worth seeking legal advice before making any major decisions.
2. Take Out a Fast Loan
Although traditional loans tend to take a long time to be approved, there are other types of loans that can be used to resolve cash flow issues. Pay day loans UK can be a great choice for businesses that require funds in a hurry, for example. At Payday UK, you can apply for a loan in seconds and be approved in minutes. With the option to access your funds almost straight away, you can resolve cash flow problems practically instantaneously.
3. Negotiate Longer Payment Terms
When your incoming cash flow is disrupted, it may make it difficult for you to pay your company’s bills. Without your usual income, for example, you may be unable to pay suppliers, utility providers, and landlords. If your cash flow is disrupted, rather than decreased, negotiating longer payment terms could help to resolve the situation.
Providing your cash flow will be reinstated, and you’re confident you will be able to catch up with your bills, having longer to pay could be just what you need. Do be aware, however, that interest could accrue on unpaid bills, even if other parties give their consent for you to extend the payment terms. This means you may pay more overall, but it could avoid your business getting a poor reputation amongst suppliers and partners.
5. Instigate Collections Activity
If you’re owed money, instigating collections activity could encourage the debtor to pay more speedily. You can send numerous polite reminders and be ignored, but when you begin to send more formal correspondence, you’ll be surprised at how quickly people pay their bills.
For small and medium-sized companies, handling collections in-house can be time-consuming. If you want to limit the impact it has on your resources, consider using a specialist firm to manage your collections. Although you’ll need to pay a fee or commission, it will enable you to collect payments more quickly and could alleviate your cash flow troubles.
6. Cut Your Expenditure
Although reducing your expenditure won’t directly resolve cash flow issues, it will free up your cash. When you’ve got fewer outgoings, you can divert the funds to where they’re needed most. If disrupted cash flow means you’re behind on your commercial rent, for example, then cutting bills elsewhere could enable you to catch up on missed payments.
By prioritising your firm’s expenditure, you can determine which expenses are most critical. You might want to temporarily reduce your marketing budget so that you can keep up with your usual production schedule, for example. Alternatively, it might be sensible to reduce the workforce so that you can keep the company afloat.
Managing Your Cash Flow
When you have a well-honed system in place to manage your cash flow, you’ll be able to identify potential problems before they arise. This will give you longer to resolve any issues and prevent your business from being in jeopardy.
An accurate cash flow forecast will allow you to predict what level of turnover you’ll have next week, next month or next year. However, it’s also important to have contingency plans in place. When you consider what factors could affect your cash flow, you can put plans in place to remedy the problem in advance.
As well as helping to ensure your business can continue to operate in trying time, having a good handle on your cash flow will give you peace of mind. With contingency plans to fall back on and a network of reputable lenders, you can be sure that you’ll always be able to access the financing you need.
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