Here are a few ideas.
Measure your Business’ Real Cash Flow
Every business owner worth his salt should know how to read and efficiently track cash flow statements. Monitor all changes in your inventory, accounts receivable, and accounts payable. Put simply, when your inventory and accounts receivable are lower and your accounts payable are higher, this means that your cash flow is sufficient for now.
Take Out a Small Loan…
And repay it on time to convey your trustworthiness to your lender. All lenders are more inclined to lend more money or extend credit to individuals or businesses that have a great track record. Don’t be surprised if your lender raises your loan amount the next time you take out another loan with them.
Consider Using Personal or Business Assets as Collateral for a Loan
Majority of lenders will offer a higher loan amount with a lower interest rate for a loan secured by a collateral. An SBA preferred lender in MN says that using assets as collateral will communicate to the lender that you have the confidence and ability to pay off your loan and reduce the risk to your lender as well. Typical assets that can be used include accounts receivable, inventory, or real estate.
Obtain Longer Terms for your Payables
It’s crucial to build trust with different vendors by always paying off your payables on time and then negotiating for reasonably longer repayment terms once you’ve established that you always keep your word and pay on time. The average repayment term is around 45 days, but you can aim for between 60 and 75 days depending on the vendor.
Consider Taking a Loan from your Life Insurance
Although this could be risky if you fail to repay, you’re actually borrowing and paying off interest to yourself. However, your policy should be either whole life or annuity.
The bottom line, you have plenty of options to choose from to the funding you need to keep your business, well, in business. Determine how much you really need. Research everything you can about each option and study them from every angle to ensure that whichever option you choose will still be in line with your business goals.
