Perhaps the biggest obstacle in receiving a small business loan is working capital. Because lenders want to see that you are capable of paying off your loan, you typically need to have working capital available in order to receive a loan. This creates a difficult situation if you have limited cash flow, particularly if you’re looking for cash flow financing. Learn how you can receive a loan despite having limited available cash today.

First, assess the reason why your business is struggling with cash flow issues. It could be a sign of a deeper issue, one that’s difficult to fix with a simple loan. Consult your financial history and business plan to determine whether this is a short-term issue or a long-term trend. If it’s a trend, work to reverse the restrictive cash flow situation before taking out another loan to attempt to solve it.

Once you’ve determined the solution to your cash issue, it’s time to find a short-term financing option. These options don’t require a down payment like a larger loan, so you’ll be able to access this financing even with limited cash flow. The most popular option is a business credit card. Similar to a personal credit card, you’ll have instant and flexible cash available for nearly any purchase. A business credit card requires you to have a particular credit score or monthly income but typically has a higher credit limit than a personal credit card. Pay your daily business expenses on time with a credit card, then pay it off monthly to avoid excessive fees.

If your business financing is for equipment, consider an equipment loan that offers complete, upfront financing. Some equipment loans don’t require a down payment, so you can get started without saving up for your essential computer software, vehicles or construction equipment.

Another option is to borrow from your future sales. Invoice financing offers you cash now based on your upcoming invoices. Instead of waiting for up to 90 days to receive payment, you’ll receive a large percentage of the payment immediately.

Each of these business loan options works best as short-term loans. If you attempt to use them for long-term financing, you may pay a large amount of interest compared to typical commercial loans. Use these financial tools to build up your working capital and balance your cash flow before you save enough for a down payment on a long-term loan with competitive interest rates that are designed to help you grow your business and improve your bottom line.

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