3 of the Major Ways Businesses Can Receive Extra Funding
Running a business is no easy task. From working within regulations and the market to hiring and maintaining employees, the whole process is laborious. One of the biggest stresses in the operation of a business comes when you become strapped for cash. This can lead to a lot of catastrophic consequences, but there are ways out that will help you avoid losing your business.
1. Small Business Loans
If you have a solid foundation for your business but are in need of more money to make it work, this should be one of your first choices. Meet with a lender to discuss options, including business credit funding or a standard small business loan from a bank. You’ll need a plan showing exactly how you intend to use the loaned money and how you intend to pay it back. These are many possible snags that would put restrictions on your ability to get a small business loan, so it likely won’t be the be-all, end-all for everyone, but it can be an excellent resource if you’re lucky enough to have access to it.
2. Accounts Receivable Funding
If your a business that finds itself in the position of being out of cash but wealthy in unpaid invoices, you have the option of selling those invoices to a third party using a process known as accounts receivable funding. This is useful when working off of contracts that won’t pay out until a certain point. Make sure you carefully look over any contracts when signing accounts receivable funding deals, as to be sure you don’t put your business in a financially vulnerable position. Similar to small business loans, invoice factoring can be a fantastic resource, as it can be an excellent way to draw up cash flow and keep your business afloat or even thriving.
3. Business Credit Funding
If you’ve built up enough good will and credit as a business, you may be eligible for a line of credit through companies meant to help small businesses. These deals, similar to the use of personal credit cards, have downfalls, as it can become easy to overspend and find yourself trapped. Use this with caution if you decide to go this route!
Those are just a few of the many ways businesses will find to stay afloat in times of dire financial straits. Do you have any other ideas or recommendations as a business owner or manager? Please feel free to share them in the comments section down below, and thank you for reading this short, but hopefully helpful, list!