Leave No Stone Unturned in Search for Cash

Rich Russakoff
Mary Goodman
Co-founders Bottom Line Up Enterprises

www.bottomlineupenterprises.com
rich@bottomlineupenterprises.com
mary@bottomlineupenterprises.com

Is your small business having trouble paying the bills? Below are some tips for generating cash in these difficult economic times.

Bank Financing. The collapse of the secondary market, which is made up of investors who purchase bundles of bank loans called asset-based securities, is the number one reason why banks are not lending. Ask your lenders if they are still players. If they are not, ask them who is and request an introduction to the appropriate people.

Refinancing. This may be an excellent time to turn short-term debt into more manageable monthly payments. This can provide you with considerable additional working capital.

Federal, state, and county programs. These resources include financial assistance, infrastructure development grants, tax credits and exemptions, export financing assistance, and incentives for hiring and retaining employees. Contact the Department of Economic Development in your state or county to find out what's available.

Friends, family, and individual investors. These people may be the quickest and easiest source of instant cash. Be sure to create a written document spelling out the loan's purpose, terms, and interest rate. Make the lenders aware of their potential liabilities, especially if they are general partners. Consider classifying the investor as a lender, or perhaps consider a limited partnership or a corporation if liability limitation is an issue.

Personal Savings. Do an inventory of your checking and savings accounts, CDs, mutual funds, stock and bond investments, and other easily liquidated items that can be loaned to the business. If you can afford to self-finance, then loan the money to the business and establish an interest rate giving you a handsome return for your risk. If you cut your salary, loan the difference to the company. 

Personal Assets. Make an inventory of your assets, estimate their value, and determine which ones are expendable. Possibilities include investment real estate, a home that is larger or more expensive than you need, automobiles, boats, electronics, and partnership or corporation interests.

Clients. Offer clients discounts for prepaying. A dry cleaner told us that he is offering a 20% discount on laundered shirts paid for in advance.

Marketing, sales, and licensing. Ask for co-op advertising dollars from suppliers to reduce
marketing costs and consider one-shot cash-generating sales. Also, consider licensing.