How to Improve Cash Flow: 3 Alternatives to Business Loans

Whether you’re a new business or have been in the game for several years, interrupted cash flow halts everything. This issue impacts your ability to make new business investments, build capital, or keep employees on a steady payroll. 

You may have considered turning to a business loan to get through this rough patch, but there’s always the looming possibility of interest and fees. You could end up owing more than what you originally borrowed, potentially putting you right back where you started.

Fortunately, there are multiple alternatives to keep debt at bay and help your business grow. We’ll teach you how to improve cash flow with accessible, low-risk financing options and practical strategies. 

The Biggest Cash Flow Challenges Facing Small Businesses 

If you feel embarrassed or ashamed of your cash flow issues, we’re here to tell you these challenges are very common. Unstable cash flow is sometimes the natural result of building a new business, while other times it’s the result of a volatile industry.

Let’s take a look at why so many businesses find themselves in a seemingly never-ending pattern of inconsistent cash flow.

Some Industries Struggle With High and Low Seasons

One of the biggest contributors to inconsistent cash flow is an industry that depends on seasonal highs and lows. For example, travel and hospitality brands tend to see more business activity due to seasonal events, holidays, or favorable weather conditions.

However, once the low season starts or the weather takes a turn for the worse, they often need alternative funding to fill in the gap. If they don’t learn how to improve cash flow in a short amount of time, they can face weeks or even months of lost income. 

Related: How Invoice Factoring Can Help a Seasonal Business

Rapidly Growing Businesses May Struggle With Cash Forecasting

Seeing your business rapidly expanding in a short amount of time is great news. The flip-side to this growth, however, is the challenge of accurately forecasting your income. 

Some business owners overestimate how much they’ll make, later struggling to make ends meet when their cash flow doesn’t add up. They may have to sell valuable equipment, lay off workers, or cancel partnerships to compensate for the loss.

Customers Failing to Pay on Time

Many business owners find themselves in a difficult situation when they are not paid on time. They either lose valuable time chasing down the payment or cut their losses. 

Either way, they end up in a worse spot to meet their profit margins and grow their business. 

Fortunately, you don’t have to take out a business loan to start making consistent income again. You can build new systems into your business model to create more predictability throughout the year.

Related: Get Your Invoices Paid Faster With Business Services Factoring

3 Alternatives to Business Loans to Improve Your Cash Flow

While a business loan is a reliable method of small business funding, you may find it too risky. Business loans sometimes take weeks before they’re approved and come with the risk of fees if you don’t pay them off in time.

These alternatives will help you learn how to improve cash flow without increasing the chances of debt.

1. Expense Reduction Strategies

You’d be surprised by how many expenses you don’t need—or need less of—in your business. Temporarily improving your cash flow is easier when you narrow down your weekly, monthly, and yearly payments.

From there, you can figure out which ones you can temporarily live without until you get back on your feet financially. Depending on your industry, a few good places to start cutting back include: 

• Switching to a lower-cost supplier for a brief period. 
• Trying virtual services instead of in-person.
• Outsourcing to freelancers to cut back on expenses like office space, equipment, and benefits.

2. Renegotiate Payment Terms

Learning how to improve cash flow not only means cutting back on expenses, but also improving existing operations. Consider renegotiating costs if you have a strong working relationship with suppliers or business partners. 

Many businesses would rather offer a discount to a trusted partner than go through the trouble of finding someone new. Renegotiating doesn’t just go one way, either. You can offer suppliers or business partners an incentive in the form of:

• Consistently paying on time.
• Signing on for longer contract periods.
• Providing extra non-monetary benefits, such as access to special deals or exclusive customer service.

3. Try Invoice Factoring for Small Businesses

If you’ve felt unsure about signing on for a business loan, the benefits of invoice factoring are immediately clear. This financing option offers a low-risk alternative by dispensing with debt in favor of fast, reliable funding. 

Many businesses struggle with cash flow due to unpaid invoices, losing valuable income they could spend on marketing, equipment, or payroll. Invoice factoring is a process where you sell your unpaid invoices to a third-party invoice factoring company. The company will purchase your invoices at a discount, then collect the full amount from your customers.

Since invoice factoring gives you straightforward payments (and doesn’t require you to pay the money back), it’s a simpler alternative to a loan. Since 1969, Riviera Finance has been helping small businesses learn how to improve cash flow with fast and accessible invoice factoring solutions. 

When business owners contact us with their cash flow issues, we offer scalable financing that supports – not overhauls – their current business model.

How Riviera Finance Helps Small Businesses Build Capital and Trim Debt

Our financial solutions provide a sturdy backbone to help small businesses regain steady income. We provide invoice factoring with a streamlined online application process and 24-hour payments to save you time and money.

Since each industry faces unique financing challenges, our experienced team offers specialized cash flow management services across freight, oil and gas, commercial cleaning, hospitality, construction, and more. 

You don’t need to worry about a lengthy loan approval process or late payment fees with invoice factoring. Get started with Riviera Finance today to start improving your cash flow and stabilizing your business.