Business financing alternatives

Are you struggling to keep your business afloat? A weak economy and poor consumer spending has a lot of small business owners closing their doors and walking away. If you don't want to fall into the large percentage of businesses that fail due to financial problems than you need to consider some methods that may be able to keep your business alive. There are several financing alternatives out there, you just need to know where to look.

Talk to your creditors
As a business owner you have a lot of control over your accounts and it is up to you to speak to your creditors and find out what can be done. They may be able to offer you a lower interest rate or monthly payment amount, reducing the financial strain on your cash flow. Creditors could offer you a larger line of credit but they will only do this if you have been a good customer to them and you never miss payments and if your credit is good.

Negotiate with your bank
One thing you need to do is contact your bank. Let them know of your situation. Ask them for help. Some banks will be able to give you a loan where others will not do anything. Not talking to the bank is worse than just defaulting on your loan and having them become upset with you. It is better to inform them of your situation and find out if there is anything they can do. If you have been a good customer they might be able to give you a month where you don't need to pay. This can give you an extra month to collect money from your customers and to get them to pay their bills so you have money to pay to the bank.

Debt consolidation
Does your business have a lot of debt? If you are in debt you need to do all that you can to get out of debt. What you may need to do is work with a debt consolidation company to find out how to pay off your debts. They may end up providing you with a loan as long as you agree to a higher interest rate. With a debt consolidation loan you will take the money you have in other loans and put them toward the debt consolidation loan. This will leave you with a single monthly payment so you have more money free each month to put toward other debts. It is a great way to save yourself money now even if you do have to pay more money in the long run because of the interest rate. Once you start to control your cash flow again you can start paying more money towards your debt consolidation loan and get yourself out of this financial bind quickly.

Invoice factoring
Where is all the money your company is making? It's probably tied up in the invoices that your company has out there. You should look into invoice factoring if you would like to get your company out of debt. What invoice factoring will do is give you the money from all of these past due invoices that are out there so you can use it to pay your vendors now. The factoring company will only pay 80% of the face value of the invoice and they will do all of the collecting on the invoice. As long as your customers have good credit and good payment history, you will have an easy time getting a factoring company to provide you with the money you need.