Don't Be Too Proud to Ask

I can certainly understand that cash flow in many businesses could be tight right now. Your clients are slow to pay if they pay you at all. In turn, you may pay your vendors slow and it all trickles down the line right to the tip you used to leave for the valet that parked your car. Traditional sources of funding are finding it challenging to lend based on their own significant problems.

There are alternatives. Community banks, especially newer ones, tend to be a bit more open to making a deal happen. This is because they don't have bad debt on their balance sheets and they have fresh cash to lend. In fact, they really need to lend it to move their efforts forward. They also want to gain momentum and market share from the big banks as they languish in all the bad press they have received lately.

Yes, you can go to a company that offers factoring (http://dictionary.bnet.com/definition/accounts+receivable+factoring.html) as a solution, but you may pay a hefty rate because of the nature of the high risk they take. Your business may not be the type that will work with this type of solution, but it is worth a simple phone call if you are in need and think it may work for you. There are reputable ones out there, don't get discouraged.

You can also reach out to colleagues; whether it be a vendor, friend or one of your suppliers. Now it may seem risky to let someone outside your inner circle know you need cash to shore up your business operations, but if you choose wisely when asking you might have the answer lurking right under your nose. Think about it....who knows you better than your clients and vendors that you have been working with successfully for years. They certainly know your trustworthiness better than a traditional lender you may not know very well. They also may have a real vested interest in your success depending on the relationship.

So don't be too proud to ask around and find the right lender for your needs. Let's face it, if you don't really have a plan for the money no amount will save you; you probably will not get the loan from anyone. I am suggesting these techniques for those folks that truly have a plan for the cash and can show how the use of the funds will turn things around. I am betting a good entrepreneur would rather make a loan to an up and running, previously profitable business than an upstart with no track record of positive cash flow.

If you need help with some sources....give me a ring or an email at rbasso@liadvanatge.com.