Financing Your Small Business in a Cash Crunch

This might be your situation: You have a start-up business, something you run from your home and on a shoestring. You (or your spouse, or a business partner) are still holding down a “regular” job, bringing in cash that you need to live on and perhaps with enough money left over to cover your business expenses. Eventually, the business could grow – should grow – to where it becomes your full time work and a dream realized.

But virtually any and every business, in its start-up phase as well as into mature stages, will run into a cash flow shortage. Maybe you just got a big order from a client, but that means you will pay upfront for some costs (labor, materials, shipping, warehousing) before the client pays you. If you’re smart, you get a contract so you know there will be no reneging on the order. But your contract will probably not be able to demand all cash upfront. So you are the one to finance those initial costs.

When facing a cash crunch like that, your other business revenues may not be sufficient to cover those costs. Given your new-in-business status, you might not be able to get a short-term loan or line of credit from a traditional bank.

A dilemma? Doesn’t have to be. If you (or your spouse, or your business partner) are working still at that “regular” job, you basically have a credit line through a payday loan . This is a cash advance you can take from your next paycheck – money upfront that you repay in your next paycheck (or in installments, by rolling over the loan into two or more paydays).

Certainly, payday cash advance loans come with costs. And the total amount of those costs can escalate over time – but as a savvy entrepreneur, you know that. All loans – cash advance or credit card or bank business loans – come with a cost that is calculated against time. Pay back your cash advance in a timely manner and you keep that cost to a minimum (such as, when the customer pays on their invoice).

In a modern business world, particularly in the age of the Internet (good payday loans are available online), smart solutions are just a few clicks away.