There are things in business that you can plan for, but sometimes you’re faced with the unexpected. In theory, business owners everywhere should have an emergency fund tucked away for situations like these. But, in reality, many of us today don’t have this emergency fund at our disposal, which makes dealing with an unexpected downturn a lot trickier.
There are so many ways that you can go about getting some extra cash for your business. However, some ways are quicker than others, and same take a little bit more of your time. The best thing is to be prepared and start saving for an emergency business fund today. In many companies, owners protect themselves by maintaining a surplus of cash flow. But, if you have already found yourself in a tough spot and you need to get cash quickly, here are some simple ways to go about it.
Make An Appointment
If you have a good relationship with your bank, which is highly recommended to have in this day and age, then you are already one step ahead. Set up a meeting, explain the current business climate to them and ask for solutions. A bank loan or line of credit will give you a bit of leeway in terms of your spending. It will come with a cost, but if they can give you this service, it will go a long way in helping the company stay on track. If you have a lower credit score, check out our post on how to get a business loan with bad credit before heading to your nearest bank.
If you prefer to take matters into your own hands as a business owner, then take a look at your personal jewellery collection. Silver and gold hold value for cash. If you sell them, these items can raise you a significant amount of money quickly. Just be sure to take the depreciation formula into account before you set asking prices for your pieces. If you are too sad to part with your jewels for good, you could pawn them, because then you will be given a period in which you can buy them back before they are resold.
Borrow From Yourself
If you have a retirement account, you can take a loan from yourself. This is not the best financial decision you could make. But, it will probably still prove cheaper than the interest rates for traditional cash loans or payday loans. There are some conditions to borrowing from a retirement plan. You can only borrow from an IRA once a year. You will also be expected to repay the money within 60 days or less. If you need to borrow more than half of your retirement savings, this is not allowed. You will need to look to other alternatives to make up the extra cash. If you need to get cash now just to help you make it to the next invoice, considering taking a loan from your retirement savings account.
If valuables are personal for you, then it is time to liquidate some inventory! We are living in the the era of secondary markets. Take a look at what you have lying around your warehouse, office or production facilities. Any products, equipment or materials you have not used or sold in the past 6 months needs to be liquidated. Company cars are also up for grabs if you are really struggling. Odds are, you probably will not be getting use out of them soon. Collect it all, put a price on it and start selling in secondary markets like eBay and Craigslist. Or, you can try contacting existing customers for one-time deals. Remember, people in every industry love to take advantage of bargains, giving you the capital boost your business needs or the dental practice financing you require as an entrepreneur.
Short Term Loan
If you don’t have the time to get your sales going, then consider taking out a short term loan for your business. These loans generally require some sort of security, like a car title loan or a payday loan. They can also be secured quite quickly, most of them taking around an hour. If you need cash flow right away, you may want to consider this route. But, remember to first consider the pros and cons of short term loans.
Finally, if you have a good support system of venture capitalists or angel investors who are willing to invest in the company, see if they can give you a loan instead of an investment. To avoid any problems, draw up a simple contract and make sure not to default on repaying them. They are experienced at charging high interest rates and claiming against business assets.
Credit Card Cash Advance
Some business owners may be hesitant to take advantage of cash advances offered through the best business credit cards. However, it may be a wise decision to consider if you are really strapped for cash. To get cash, all you have to do is visit an ATM and withdraw the money. If your business credit card interest rate is not too high, this may be the best option for you. If the rate is a bit higher than you are comfortable with, try this option only if you have exhausted every other one on this list.
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