Are you a small business owner who is in desperate need of some extra cash? If so, you’re not alone.
A lot of small businesses find themselves in this situation at one time or another. Fortunately, there are a few things you can do to get the money you need. Here are a few tips to help you out.
1. Sell Your House
This is admittedly an extreme measure, but it’s often the most effective way for a small business owner to get some cash quickly. If you don’t mind uprooting yourself and living elsewhere temporarily, then selling your house may be the best option for you.
Granted, real estate is the least liquid asset, which means it usually takes you a while before you can convert this to cash. However, if you search “sell my house fast” in your state or city, you will find buyers willing to unload you of the property within a week or even less.
Now, you may be worried that you may end up getting less than the price you want for your house. But the best buyers will consider many critical factors such as the market value, equity, and condition of the property.
2. Get a Payday Loan
If your cash requirement isn’t thousands of dollars but you still need money to tide you over quickly, you can apply for a payday or small personal loan. A loan company will provide you with the cash you need for an interest fee.
The good news is you can pay back the amount with your next paycheck, so there’s no long-term commitment on your part. The processing is fast too. Usually, you’ll have the money within 24 hours or less. The requirements are not extensive either, and some will let you borrow even if you have a fair or bad credit score.
Keep in mind, however, that these types of advances have significantly high-interest rates and other charges. If you don’t research well also, you might end up dealing with shady lenders.
3. Get a Line of Credit from Your Bank
A line of credit is a flexible financial arrangement you set up with a bank or lender, who will give you an account with a credit limit. Whenever you need cash, you can draw funds from there.
Then, you can return what you owe as soon as money comes in or choose to pay the loan monthly. The primary rule is to ensure you don’t go beyond the limit.
It appeals to many businesses since the interest rates are more likely to be lower than those of payday or personal loans. As long as they don’t go overboard, funds are waiting for them. Moreover, if you’re paying the loan on time, the bank may increase your credit limit.
However, banks are less likely to give you a line of credit if you cannot prove that you or your business is financially stable. You may also be prone to overspending, and penalties are stiff if you are late paying the dues.
4. Sell Business Assets, Including Inventory
Another way to raise funds fast is to sell business assets, especially pieces of equipment and supplies you barely use, as well as inventory. Just make sure you know your business’s real needs first.
If there are excess supplies of raw materials, for example, then you may want to sell them off to a third party or retailer instead of letting them deteriorate in storage or incur additional costs hauling back and forth. If they’re in mint condition, you can usually get good prices for these items too. Most of all, you can reduce other expenses like overhead and even potentially boost your cash flow.
5. Invite Investors and Partners
If you think your business is promising, then now may be the time to bring in investors or partners. Just remember that they will expect to see their money back with generous returns.
Your best bet would be to find one partner with enough capital and another who has the skills and expertise you need for your company’s growth goals. You can also consider looking for local or foreign angel investors and venture capitalists.
Assuming you’ve got the right person, they will be invaluable to your company since they may have contacts in other companies you can tap as clients too.
Sometimes desperate times call for desperate measures. These ideas may be uncomfortable, but they may be the solutions you need to avoid getting into bigger trouble like filing for bankruptcy or shutting your business down.