How To Raise Cash Quickly For Your Business
Whatever stage your business is at, money is always on your mind. As a CEO, you simply cannot avoid it. Raising investment and capital is one of the hardest challenges for any business owner. Making those accounts add up and keeping the money coming in can really grind you down. The past few years have been especially tough on new business owners. The economic crash has seen a drop in commercial lending and private investment.
Itâ€™s a vicious cycle when your business is running low on cash. Youâ€™re losing money, but you know that the only way to break out is to spend money. Money that you donâ€™t have! Itâ€™s an agonising position to be in. However, there are some options out there for you. There are plenty of ways to generate money to reignite your business. You just need a little creative thinking and a good head for numbers.
Sometimes, all it takes is a small cash injection to get you back on your feet. You can build up the stock, fulfill a few more orders or projects and be back on your feet. A loan is a good way to do this. However, as we mentioned, commercial loans have been down in the dumps recently. They are slowly picking up, but not fast enough. Here are some other options for you to explore.
Invoice Finance – Invoice finance works by lending money against your unpaid invoices. Many businesses are suffering from money problems having already completed their work. They send out their invoices and wait patiently. Unfortunately, the client isnâ€™t always so quick and it can be months before you see money. Invoice financing helps alleviate that trouble. You get the money you are owed quickly. Then you pay back the lender when the clientâ€™s money comes in.
Asset Based Lending – This is a loan that uses your assets as collateral. Youâ€™ll assess the value of your business assets. Thatâ€™s your equipment and sometimes business property. Then youâ€™ll receive a loan to this amount. Of course, if you donâ€™t pay it back, the lender will seize those assets. Do make sure you can afford this loan before you apply.
Enterprise Finance Guarantee. – With the lack of commercial lending, the government has stepped in to help. They know that helping businesses will help kickstart the economy. Theyâ€™ll back 75% of a commercial loan, taking the burden away from the lenders. There is typically a 3-10 year repayment schedule.
Bank overdraft – This is a particularly flexible form of lending. It does have its downsides and can be dangerous. Check whether your account offers this function. Then assess whether that money can be used wisely and returned. Donâ€™t just use it as a pot to dip into for the little things.
Borrow from friends and family – This is often the preferred route. When it comes to family or friends, you wonâ€™t usually take more than you need. The terms and interest could be much lower and you wonâ€™t have the lender looming over you. Again, just be sure that you can pay it back. None payment can cause rifts and problems with the people closest to you.
Loans can really help your business back onto its feet. Just make sure that you have a solid plan in place for the money and follow it to the letter. Lenders will be checking up on you. Use it wisely, you donâ€™t want to fall further into debt in this way. If a loan isnâ€™t the right solution for you, letâ€™s look at a few others.
One great way to build an tangible cash pot is to sell your assets. This doesnâ€™t have to be a mammoth task. Just assess the equipment and property that you no longer need. Use Auto Trader Plant to sell off large bits of machinery, for example. You could sell office property and implement a remote working environment for some employees. You might even see better results when allowing your employees to work from home. There are plenty of options here and youâ€™ll have to look at your business to see where you can benefit.
Kickstarter and fundraising
One of the most popular new ways to raise money is by online fundraising. Kickstarter has been harnessed by small companies all over the world. In some remarkable projects, millions of dollars has been raised. These work best if you have a strong mission statement that the public can get behind. Use a passionate explanation for why you are asking for this money, and why people should invest. They donâ€™t pay a penny until you hit your target. Have a quick look and see if this might work for your business. It works particularly well in the media sector.
Refinance your home
This is an extreme option, but in the current market, itâ€™s not the worst idea. House prices are slowly turning around. Talk to your mortgage broker and see if a new arrangement can be worked out. Freeing up some of the money in your home can provide you with a cash injection for the business. Of course, speak to your family before you take this route. It could have a negative effect if the risk isnâ€™t managed correctly.
Finally, it is still worth seeking out private investment. There are plenty of rich investors out there looking for the next big thing. Startups, in particular, are on every investorâ€™s lips. They all want to find the next Facebook, Twitter or Snapchat. Craft the perfect pitch and business plan and start booking meetings. If you are passionate and have a great idea, investors will latch on to that. The added bonus here, is that you will also add some knowledge and experience to your company.
As you can see, there are plenty of ways to raise money quickly. Sometimes, that little injection of cash is all it takes to turn things around. This is by no means an exhaustive list. Think outside the box and find the right solution for your company.