Cash flow can be a significant issue for businesses, especially when it dries up. After all, there are always suppliers to pay, overheads to cover, and resources that you’ll need to use to ensure your business will run. In fact, without paying out for these things, your revenue will start to falter. Luckily, there are some tactics you can use to keep the cash flowing to your business’s coffers. Read on to find out what they are.
Line of credit
The first way to deal with a cash flow problem in your business is to secure a line of credit with your bank or lender. A line of credit is different to a loan because it is prearranged, and this means if you have a financial emergency where you need money quick you will already have access.
Of course, getting a line of credit secured can be tough, especially if your business doesn’t have a good credit report. In fact, you may find that you need to provide extra information, and only be granted a lesser amount until you can prove yourself a good investment to your financial provider.
Next, one issue that can often cause a major problem with a company’s cash flow is customers not paying invoices on time. After all, if you are a small business it only takes a few late payments, and you can find your coffers all but empty, yet still have outstanding bills of your own to cover.
One way to deal with this is to reduce the payment term of your customers, something that means you are guaranteed to keep money flowing into your business’s account more regularly.
Another solution would be to use an invoice factoring service. This being a provider that will pay the outstanding cost of the invoice to you minus a fee, and then pursue payment of the debt from the customer themselves. Something that means you can all but instantly unlock the money that your business is owed.
Another smart tactic that can help to keep your cash flow moving is to sell on assets that you no longer need. In fact, doing so makes excellent financial sense because, not only will you be getting rid of items that are using up space, another asset that you are paying for, but selling them can provide a massive cash injection into your business as well.
Of course, to get the best price possible, it’s smart to pick an auction house that specializes in the type of items you are selling. That means if you put your truck up for sale you will want to find a platform to sell it on that markets directly to the type of buyer you are looking for. After all, by doing this, you can get a much faster sale and so have that much-needed money in your account a great deal quicker.
Finally, when it comes to keeping your cash flow going don’t forget that there are providers that can offer your business loans, both over the short or long term.
Although, as with any other borrowing you will be charged interest on this. Something that means this option is perhaps best left until all other ways of keeping your cash flow moving are exhausted.