Things to Assist with Business Cash Flow
Are you a business owner concerned that you still may have cashflow issues in the months ahead? Do you wonder what you can do to rearrange some of your debt to provide additional financial resources?
Today I am going to offer a few tips that can help you change what your current position is into something that may result in better cashflow.
The first thing to look at is restructuring your current debt. If you are operating with credit cards that have higher interest rates, perhaps you can fold that into a lower interest loan, or at least a credit card with a lower interest rate.
The second thing you can do is to look at SBA loans. The SBA doesn't actually offer the money themselves but partners with banks. But they do back the loans that are offered so that banks are not as scared to offer funds to businesses who qualify. I am not referring to the PPP and EIDL loans that many received, but their traditional loans available to entrepreneurs.
But understand that adding additional loans or restructuring your debt may not work. You may need to look at your expenses and cut back where necessary to do with what you currently have rather than expanding your debt to acquire additional funds.
Make sure that you are talking with your bank (hopefully have a relationship with your business banker). And if you have a loan with them, they may be able to reduce the payments, change the terms or work with you in some other way.
And finally, investigate having a credit line. This is not money that requires a payment unless you pull funds out to use in your business. So, having a credit line means you have cash available when necessary, but you do not have any payments or interest until you start using those funds. There is usually an annual fee to have access to the money, but it is well worth it if you can draw funds when needed and avoid higher credit card fees.
If you have questions regarding how these forms of funding may impact your taxes, be sure to schedule a time to chat with your CPA and understand the impact on your liability.
