I was recently meeting with the owner of a business, after spending a couple of hours drilling down on their numbers looking for costs to cut. They are currently going through a cash crunch and the immediate future is not looking promising. Historically their fourth quarter does reasonably well, so the third quarter needs options.
So I had a conversation that I have had with other small business owners.
The banks lately are not always a small businesses friend, so other pockets need to be found. Typically owners look to tap their own personal cash reserves. Then they typically look at their HELOC. There is also any other personal pockets.
Granted not all businesses have all of these options available. Then we look at the possibility of credit cards, never a great idea in my mind. The costs are huge, but businesses have done this successfully in the past.
Beyond credit cards, there is the factoring of receivables. Again the costs can be huge.
Beyond factoring there are the hard money lenders. Now we truly are talking about expensive options.
So there are cash options of varying degrees that can offset the juggling of payables, stopping the owner’s paycheck, reducing overall hours or the extreme of laying off of staff.
For assistance with reviewing your options give us a call to schedule an appointment.