Entrepreneurs must be prepared to face any hurdles, including financial emergencies that must be solved in an extremely short time interval. Moreover, even though you should always have a reserve fund you can tap into in case of emergencies, things don’t always go as planned or as expected.
As a business owner and main decision-maker, you have to take calculated risks and be prepared to face the consequences when things take a bad turn. Additionally, there are factors out of your control that may take a toll on your savings and overall income stream(s), like the COVID-19 pandemic. Many small and medium-sized businesses were forced into bankruptcy because they couldn’t support the salaries without a clear line of income.
So, when things go sour, you need to know your options if you need to get your hands on cash, fast. Here are a few things to consider:
#1: Bank Loan or Credit
The first option that comes to mind when you need cash you don’t have, is a bank loan. Depending on your financial situation and overall investors, you may get a pretty nice amount that will keep you going for a while.
However, bank loans don’t happen overnight and you need a solid credit score to get the amount you need (or any amount for that matter). So, if you need cash now, a loan from a financial institution may not be the quickest way to get it.
#2: Same Day Loans
Yes, it’s exactly as it sounds - you can get quick loans on the same day without too much fuss or paperwork. You apply (online or in-person) and, if you’re eligible, your application is approved and you have the money in your account.
On the downside, you can’t ask for big amounts, but you will be able to solve most financial crises that don’t require a lot of money. Still, it’s best to only use this option if you have funds lined up in the near future since the interest can be a bit steep (which is natural considering the speedy delivery).
#3: Ask a Friend or Family
If you have this option on the table, and you trust the person is reliable and won’t hunt you down for payments, it’s best to try it first. When you lend money from someone, you don’t have to worry about interest or having to pass a background check. Usually, if they can help, they will do so and you can solve your crisis while keeping your peace of mind.
#4: Find an Investor
If your business is going well or if your future prospects are looking good, you may solve this issue by finding a reliable investor. Many rich people and organizations are looking to support new entrepreneurs on the verge of becoming a global success, so all you have to do is convince them of your viability.
It may sound difficult, but a solid business plan and a well-designed vision usually do the trick.
#5: Find Alternative Sources of Income
Sometimes it takes a crisis to see the big picture and discover a different path for your business. So, before you fall into despair, take a closer look at your business activity and assets. Is there something else you could do, with the current resources, that pays well?
Also, check if any of your assets can be monetized without going through too many hurdles. Even if it’s a painful decision, it may be the right one for your current situation.
Emergency cases do happen, but it’s best to keep an open mind and first consider alternative solutions. For instance, there are ways to fund a project that’s dear to your heart without digging into your savings. Moreover, your network may come through in case of an unexpected emergency, so don’t dismiss the power of connection and communication.
WRITTEN BYClaire Ward