3 Ways to Keep Your Small Business Afloat When Cash Runs Low

Managing cash flow can be a daily struggle for business owners. There may be times when the money coming in needs to go immediately back out, making it difficult to pay vendors, develop new products, and foster business growth.

When you need to access extra funds in a hurry, here are three routes to consider.

Tap your savings account or emergency fund

Do you have a business emergency fund? If so, consider tapping your savings to cover unexpected repairs, revenue shortfalls, or other financial challenges.

While most companies have a business checking account, setting money aside into a separate business savings account is generally a smart idea. This gives you an extra cushion to deal with unexpected events and provides an easy way to save for tax payments or other large expenditures. You'll even earn interest on your cash when you're not using it.

You don't need to make a large deposit to start a business savings account. Depositing small amounts each month when you're not scrabbling to keep up with cash flow can be a great way to build your balance over time.

Get a business line of credit

A business line of credit can be an excellent source of quick cash when you need it. With a line of credit, you can withdraw cash — to cover whatever expenses you need to cover and only pay interest on the amount you're using at any one time.

When working capital is tight, tapping your credit line helps you to meet payroll or cover rent and utilities. Since you typically can't use a credit card to pay for these expenses, a line of credit can ensure you have funds available for these crucial costs even when money is tight.