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When you start a small business, the finances can quickly get complicated. However thoroughly you planned it all out, and however cost-effective your business will be, there’s bound to be something that will throw you balance off and mean that you have a gap in your financing.

But don’t panic just yet. This isn’t the end of the road for your business and there are lots of ways that financial hiccoughs can be solved.

Take Out a Small Business Loan

You might not like the idea of taking out a business loan, but if you need an extra injection of capital, then this is definitely an option you should consider. A loan will help you to ease your finances and help you on your way to profitability in no time.

Before you do anything, you need to know exactly how much you need and whether investing in that now will boost your profitability enough to make the loan viable. This might sound very serious, but equally, loans should never be taken lightly and you may be asked what your business will do with the money before a lender agrees to terms.

Do watch out for interest rates and do the math before you sign on the dotted line. Use your worst case scenario profits to make an informed decision about whether you will be able to afford the interest and to forecast how long it will take you to repay in full. While the worst case scenario is unlikely to happen, it will give you a chance to exceed your expectations and motivate you to work hard.

Consider Invoice Financing

Another solution is invoice financing. This might not sound like a particularly attractive idea, but if you need an injection of capital in order to be able to fulfil an order and collect the invoice, this is a good solution for you.

Invoice financing works by offering you a loan secured on your customer’s ability to pay. This means that even if you have a bad credit score, you should be able to make use of this type of funding. While some lenders will only release a percentage of the funds to you immediately, you will be pleased to hear that other lenders will release all the funds straight away and then accept repayments on a weekly basis.

Cut Back on Costs

While borrowing is the simplest way to smooth over your startup’s financial problems, you should also be thinking about where you can make some cuts to prioritize the things that will make you profitable. This does take some forewarning so may not be appropriate for everyone but some expenses can be cut quickly and painlessly.

There are lots of money saving tips that might interest you. For example, if you haven’t negotiated with your landlord, now is a good time to try for a discount. You could also go paperless, saving plenty on paper and ink needs or you could even embrace telecommuting and have a much smaller physical office.

With so many ways and means, your financial hiccough will soon give way to plain sailing.


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