Entrepreneur & Investor.
Entrepreneur & Investor.

25 Unconventional Ways To Find Cash in Your Business

7 minute read

Almost all businesses ‪go through periods of distress where cash becomes very tight.

In any distressed situation, cash becomes your business’s lifeline.

There are conventional methods of getting cash into your company, like issuing equity or taking on bank debt. However, for many businesses, these traditional methods may not be an option and therefore you need to look at other ways to generate cash quickly.

This post is going to go through some unconventional ways to generate cash. I’ve actually used some of these strategies myself over the years. They’ve helped my companies survive when we were in a cash pinch.

Remember, no business ever plans to be distressed, so it’s good to always be prepared.

Some of these methods may make you uncomfortable, strain relationships, or appear a bit sketchy. But if you’re business’s existence is on the line, along with all your employees’ jobs, you’ll need to look beyond conventional ways to raise cash.

Also, keep in mind, these are mostly temporary or short-term solutions to help you survive a cash crunch.

#1 – Raise Prices

I’ve talked about raising prices in a previous post discussing ways to improve your LTV to CAC ratio.

Every business has different levels of pricing power, but often time, owners underestimate theirs. Customers, especially loyal ones, may not want to go through the hassle of finding a new supplier over a 5-10% price increase.

You may risk losing newer or cost-conscious customers looking for deals. But if you’re in a cash crisis, it’s certainly worth taking that risk.

#2 – Collect Accounts Receivable Faster‬

Take a good look at your accounts receivable aging report. Set up a daily time slot to call accounts that are well overdue and let them know that they will lose their credit terms if they don’t pay ASAP.

You could also offer incentives for accounts that aren’t overdue but willing to pay right away. Something around 1% to 3% would be typical.

#3 – Collect Upfront (COD)‬ or Take A Deposit

Stop extending all credit terms completely. Require all new orders to be paid in full upfront. Let customers know that it’s a temporary measure.

If you’re not comfortable doing this, you can simply take a cash deposit upfront on all new orders. An amount of 10% to 50% of the order value, would be reasonable.

‪#4 – Get Factoring on Accounts Receivable

If #2 and #3 fail, you can look into accounts receivable factoring. A factoring company will give you cash upfront for unpaid invoices but charge a fairly hefty fee.

Often times this type of financing is non-recourse, meaning, if your outstanding invoices aren’t collected, the factoring company doesn’t get paid.

eCommerce businesses have access to merchant advance companies, like Clearbanc, and they basically operate in a similar fashion.

#5 – Offer Preordering For New Products

If you have a new product in the pipeline, start taking preorders from customers. You can offer them a discounted price (a pre-order-only special).

Communication here is key.

Let them know when they can expect delivery, what to expect, and why they should preorder.

Elon Musk has famously done this many times.

#6 – Run a Sale

Everyone loves a deal.

Run a limited-time sale to drum up some quick cash. This works especially well if you don’t normally run sales.

If you’re running an eCommerce business, you can strategically target customers that haven’t purchased from you in a while.

#7 – Increase Delivery Times

This can work for eCommerce businesses or any other business that gets paid upfront but delivers later.

If you offer 3-5 days delivery, increase it to 5-10 business days to keep cash in your business a few days longer.

#8 – Increase Refund Times

Instead of issuing cash refunds right away, implement a 5 to 10 business days for all refunds policy. This will slow the departure of cash from your business.

#9 – Eliminate Refunds or Offer Store Credit Only

Instead of offering refunds, change your refund policy to final sale on all purchases or orders.

If you aren’t comfortable with doing that, move to a refund policy of store credit only. Depending on your customer return rate, this could drastically reduce cash departing from your business.

#10 – Pay Accounts Payable Slower‬

You’ve built up a lot of goodwill by paying your vendors on-time or early for several years. In a cash-crunch use this to call in some favours.

Again, communication is key.

Call your vendors ahead of time, let them know cash is tight and that you’ll be a few days late. Make them feel comfortable by letting them know it’s temporary, and you’re actively working on paying them.

#11 – Buy Inventory on Consignment‬

Work out a consignment arrangement with your vendors. Meaning, have them front you the inventory and pay them only for the inventory that sells.

This will allow you to continue to sell without having to buy anything upfront. Your supplier will have ownership over the inventory, until it sells, but it will free up cash.

#12 – Ask Vendors For More Credit or Better Terms

‬Ask your vendors to extend your credit limits or better terms. This is much easier if you have a long-term or good standing financial relationship with them.

If you currently have a $50,000 credit limit, ask to increase to $75,000. Or ask to increase your net 30 days term, to 45.

If you have multiple vendors for the same product, entice them by giving them more business, by shifting from vendors that are unwilling to make concessions.

#13 – Ask Vendors to Convert Accounts Payable to Long Term Debt

Rather than paying your vendor invoices that are outstanding, ask if you could convert them into a long-term note with interest.

Create a payment plan and a loan amortization table. Show vendors what they can expect to receive and the extra interest they would earn.

Since vendors aren’t lenders, you’ll probably need to give them above-market interest rates in order to compensate them for the risk they are taking.

#14 – Ask Vendors to Convert Accounts Payable to Equity‬

Similar to #13, but offer (or ask) equity instead of debt. This is even riskier for a vendor, as they aren’t investors, and with equity, they have no idea when they’d recoup their money.

You’ll need to sell them on future profitability and what the company could be worth in the long run.

You’re taking on a new business partner here, so be selective with who you offer this to.

#15 – Move Retainers to Contingency

If you’re working with any sort of performance-based professionals or contractors, rather than paying a fixed retainer, pitch them on moving to a contingency arrangement.

Some examples include:

  • Lawyers – pay them a % of the settlement
  • Marketing agencies – pay them a % of revenue
  • Accountants – pay them a % of a tax refund or taxes saved

Entice your vendor by showing them how much money they will earn by agreeing to a continent payment plan versus a fixed retainer. But this will certainly save you some cash in the short term.

#16 – Accrue Contractor Fees

If contingency doesn’t work, ask contractors/professional service providers if you could accrue their fees on your books.

I know I’m beating a dead horse here, but, communication is key. Let them know it’s only temporary and that you are working diligently to improve cashflows for your business.

You can entice them by offering a little bit of interest on the amount owed.

‪#17 – Require Approval For All Payments‬

Often times, the accounting department is trying to pinch pennies and preserve cash while the purchasing department keeps buying.

Implement a fairly low threshold, and any purchase over that threshold needs to be approved by the CEO or CFO.

Purchasing departments love autonomy, so this certainly isn’t ideal for them. Let them know that it’s just a temporary measure.

‪#18 – Sell Equipment‬

If you have any unused or under-utilized equipment, sell it. With online marketplaces like eBay, Craigslist, and Facebook Marketplace, you’ll be surprised how quickly you can get rid of stuff.

Even if you feel you might need the equipment at some point in the future, you can always repurchase later when the business’ cash position improves.

#19 – Sell or Return Inventory‬

Inventory can be one of the largest sources of cash drain in a physical goods business.

You can try liquidating inventory by selling to:

  • Customers – Try pairing it with #6 and run a sale for that product. Target customers that have purchased it before, offer them a steep discount.
  • Supply Chain – Try selling the inventory to someone else in your supply chain. If you’re a retailer, try selling it to a wholesaler or distributor, and vice versa.
  • Competitors – Try selling it to a competitor through a 3rd party like a friend/family member.
  • Suppliers – Try returning inventory back to where you originally purchased it from.

Al these methods might harm your margins, and force you to take a steep loss, but could generate cash very quickly.

#20 – Sublease Parts of Your Business

‬Do you have extra office/warehouse space? Empty parking spaces? Equipment or company vehicles you’re not using?

Try subleasing to generate some cash. You can work out a month-to-month contract that allows you to terminate upon notice. That way once things are back to normal, you can get rid of the sublease.

#21 – Sale-Leaseback‬

This works if your business has significant assets like real estate or large machinery.

Sell the asset, and arrange a long-term lease agreement with the new buyer. This is more of a long term strategy since the decision is permanent. You will have to do a thorough financial analysis before pulling the trigger on this one.

This should free up significant amounts of cash for your business.

#22 – Try to Expedite Any Tax Refunds‬

If a tax agency owes you money, hassle them to expedite the tax refund.

This can also work with #15. Incentivize your accountant with a contingency plan and pay them a % of the refund.

‪#23 – Reduce Employee Hours

This should only come subsequent to the owner taking a pay cut first. Show employees you are committed and making sacrifices yourself.

Motivated employees will sacrifice for the common good. Show them how the company will get back on its feet, and how they are integral to the company’s success.

‪#24 – Stop Paying Down Debt‬

This one is risky. You need to know your lender and loan agreement well. But your business defaulting is a risk your lenders took, so don’t feel bad, it’s just business.

Missing debt payments will move you into their “bad loans” department where people are authorized to negotiate, discount, and restructure debts.

#25 – Move Cash From Your Lending Bank

If you have a loan from a specific bank, don’t have cash deposits going into that same bank account. This makes it a lot easier for the bank to freeze your funds and exert control over your business.

Reduce risks by moving cash deposits to a different bank. This may also spur your lending bank to open negotiations.

Final Thoughts

The key themes in all the strategies listed are communication, negotiation, and thinking outside the box.

Running a business is tough, and cash becomes king when the going gets rough. A few extra days of cash might make the difference between life or death for your business.

Many of these strategies were inspired by the book Corporate Turnaround Artistry by Jeff Sands. I highly recommend this book. Even if your business is nowhere near distressed-status, you never know when the tides will turn.

I hope you found value in this list. I know I’ll be referring back to it when I need to.

Do you have any short-term cash strategies, that weren’t mentioned here? Leave a comment below!


Hi there! I’m Jay Vasantharajah, Toronto-based entrepreneur and investor.

This is my personal blog where I share my experiences building businesses, making investments, managing personal finances, and traveling the world.

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