One of the biggest challenges for startups and small businesses is keeping the money flowing. You might have raised enough cash to get things up and running, but unless you can keep the cash flowing, then chance are your business is going to struggle.
Unfortunately, if your cash flow isn’t exactly great, and if you haven’t been in business for a very long time, then you might not be able to get access business loans, which are the simplest form of finance when you need one to tide you over. There’s no need to despair though because, if you’re struggling with business loans, there are alternative ways of raising money when you need it, and which if used correctly, could help you to keep the money moving and your company in business. Here are some of them:
Crowdfunding is the process of asking people on the web to give you money for your business simply because they like the idea or they want to own whatever it is you plan to sell when you’re up and running. It’s a really good option for small startups because it can help you to raise the funds you need to get things off the ground, and all you have to do is pitch a good idea.
That, however, is not the only use for it. You can also ask individuals to contribute a small sum of money each month towards your business to keep it going. In return, you will usually have to offer them an incentive, such as a free product when you go into production or free access to some of the courses you sell, for example. So, if you have the kind of business where you can keep people interested and persuade them to donate to help you keep going, it could prove quite fruitful.
Invoice Factoring And Cash Advances
If you’re struggling with a cash flow situation that’s been caused by your clients not paying up on time, then instead of trying to get a loan to tide you over, or using the company credit card to see you through, you might want to look into invoice factoring and cash advances
Basically, whereas you borrow bank loans based on your company’s ability to pay the money back, you borrow money from merchant/invoice factoring companies based on the worth of your outstanding invoices. It’s basically like selling on your debt to a third party. It can be convenient, but you should bear in mind that they will take a small fee or around 20 percent of the invoice’s value for providing you with the ready cash, but if it helps you keep the cash flowing, it’s certainly not something to be dismissed.
Peer To Peer Lending
Finally, peer to peer lending can be good for small businesses who need an injection of capital in a hurry, Why? Because instead of borrowing from just one source, you’re borrowing from a group of people, which means there is less risk for them, so they are more likely to lend to you. Of course, they’ll still assess your risk, but you might be pleasantly surprised.
We hope you can keep the cash flowing and the wheels of your business turning. Good luck!