Easy ways to release cash for your business
I have been advising one of my friends who is in the infancy of his own interior design business. So far he has been working with other businesses; however for some work he hasn’t been paid. Despite the fact that he has had to pay out for work to be done and equipment and products for the properties he has worked on.
Unfortunately in this day and age, some companies change the goal posts on when they pay you, however as a small business, you have less leeway on when you pay your bills. This leads to extra debt problems which my friend is struggling with at the moment. I have done some cash in hand work for him, however I am willing to wait for my pay, but some other places aren’t and when the people you did the work for are slow at paying, and it puts stress on the man in the middle.
Something I have come across online is companies who help you release cash from your invoices, they ‘buy’ the money owed off you, for an amount less than what it is worth, then they are the ones who have to chase the cash owed. This isn’t a bad option when you’re in quite a bind, as it means you have the cash when you need it. Although you don’t get the full amount, it may be better than paying your bills with credit from a bank charged at a high interest rate. It also means you don’t have to spend time chasing the money yourself.
I have been wary about things like this in the past, however when companies are being, squeezed and squeezed, sometimes this type of arrangement is the best on offer. It’s not like the Government are currently helping small businesses, banks are still charging at the higher rate and calling in loans causing many to struggle. Plus news that HMRC are coming after small businesses for tax they are dodging, legally and illegally, it makes you wonder whether anyone cares if the UK recovers.