3 Ways To Finance Your Business Without Credit Cards

If you’re in a cash crunch and need to locate some financing for your company here are three ways you may have overlooked.

1. Vendor Financing

You don’t have the cash to pay your bills and so a ripple effect is caused on down the line. Think about it: if you are depending on one of your customers to pay you within 30 days, and that customer doesn’t paydaysfor 90 , it can significantly affect your cash flow. Stretching out trade payables from, say 30 days to 60 days, from another perspective is a pretty common method for companies to improve their cash flow. If it’s one of your major customers, the impact canquitebe serious. Indeed, Most businesses are small businesses and stretching out payables only hurts everyone in the long run. Usually vendors are not very happy when this happens, and some even voice their disapproval in no uncertain terms.

This suggestion is different. If you’ve established a good in modern times relationshipyourwith vendors, sometimes it’s possible to get them to agree to finance part of your corporation by extending their terms for a particularly large order for an extended length of time. If you’re a novel firm with little or no history, you could approach vendors showing them your business plan and documentation of orders you’ve already received. As you may know, If the vendor is convinced that your business will be successful, and one of their better customers in the future, they may be willing to give you a break asap.

Another alternative is to guarantee the vendor that they will be your exclusive supplier for an agreed to length of in modern times time in exchange for longer credit terms. Or you can offer to pay slightly higher than industry price in exchange for longer credit terms. Actually This method can be dangerous, because it sets the precedence of a, higher price. When the longer terms are no longer necessary, it may be a challenge to decrease the price you pay the vendor.

Occasionally, it’s possible to convince a vendor to exchange a trade payable owed to them for a note payable instead, or possibly an equity position in your firm.

2. Customers That Prepay

If you have successfully demonstrated to your customers that you deliver your merchandise to them on time, as ordered, you may be able to persuade one or more of them to put a deposit on their ahead orders, perhaps as much as 50%. You can add an incentive by decreasing your price a bit in exchange deposit the for. Or you can throw in a bonus: if they’ve ordered 100 items you give them 10 extra. Actually, New customers can also be asked for a deposit, especially if it’s a large or custom order.

3.Trade And Barter

Barter is probably one of the.oldest forms of commerce It is simply the exchange of goods or services for other goods, instead of using cash as the medium. The trade can be directly between the two parties or the trade can go through a barter exchange.

The barter exchange usually works on a point system, one point for every dollar. The exchange has members who have agreed to barter their services and products. Let’s say you need a recent lap top in modern times , but the computer store doesn’t need your product/offering. You earn points by bartering with those individuals who businesses and do need your product/utility. You accumulate points through the exchange. When you have enough for the lap top, you ‘obtain’ the lap top with your accumulated .points Thetheirexchange sometimes takes a small percentage of the points as a fee for services.

It’s worth noting that Approach bartering as you would any other sale or acquire. The barter acquire is reflected more than ever on your income statement as an expense. Don’t be limited in your thinking as to what can be bartered. Therevenuebarter sale (what you trade) is reflected as . Don’t feel you have to discount your item. Deal with reputable companies.

Connect your local chamberof commerce. The yellow pages . listings as wellgive Many cities have locally operated barter organizations. Barter organizations can be found on the web, just put in trade and barter organization.

Utilize these three methods of coming up with cash for your corporation.