Start thinking about getting a loan before your cash runs dry.
It’s no secret…cash is KING when it comes to business. You can have the best product in the world, and you can be selling your services by the millions. But if you don’t have the cash to pay your ongoing expenses, then you’re on a ship that’s sinking faster than the Titanic.
It’s actually one of the paradox’s of building a business. The more your sales increase…and the more successful you become…the more cash you have to pay out to keep things going. And cash coming in from sales doesn’t always keep up with the cash going out to pay expenses.
Ironically, many companies fold because they simply GROW TOO FAST!!! For example, let’s say that you land a large contract. You need to hire a bunch of employees and expand your office space to fulfill the contract. But you won’t get paid out until the contract is fulfilled. Meanwhile, you have hungry mouths to feed. And suddenly you’re cash is as dry as the Sahara Desert.
That’s where a loan comes in. Your friendly neighborhood lender can swoop in and save the day by providing you with much needed cash flow. But it’s not always a fast process. Yes, there are lenders out there that can fund you in as little as 24 to 48 hours…but they often come with a high price tag (i.e. interest rate). A loan with a good price tag may take a few weeks to secure. So the point is to start thinking about your cash needs NOW and start working on securing that loan NOW.
How do you know if you’ll need a cash infusion? Simple (well for us anyway). Run a cash forecast for your business. Start with the cash you have in the bank today, add in any cash receipts you expect to get (e.g. customer payments on invoices), and subtract all the cash you’ll need to spend (e.g. rent, payroll, credit card and existing loan payments). If you see that the ending balance dips into the negative…then that’s the amount of cash you need to secure.
So be wary: As you start to grow, definitely start thinking about getting a loan.
Of course, the process of getting a loan can be quite cumbersome. If you don’t want to fuss with all the paperwork, then CONTACT US! We would be happy to assist you in getting all your documentation together, and working with your lender to ensure your cash coffers are full of gold.