Cash flow problems cause undue stress and can quickly spiral out of control. If you’re struggling to pay the bills, sort out your finances before it’s too late. These tips will help you cut costs and keep the cash flowing.

Get on top of your finances

It’s obvious that you need to know what you have to work with – what you’re spending and what future expenses you will incur – to manage your money effectively. Draw up a monthly budget based on known expenses and try to stick to it. Then reassess your spending at the end of the month. An accurate cash flow forecast, which can be drawn up by an accountant, is invaluable for any business.

Keep your paperwork up to date

Start by staying on top of debt, paying your bills on time and keeping a record of all payments (made and received). If you’re working for yourself or running a small business, follow up on unpaid invoices and learn to invoice as soon as you have completed a job – the sooner you send an invoice out, the sooner you’ll get paid.

Cut costs

Look for non-essential expenses and cut these. In your personal capacity, try to reduce spending on transport and non-essentials. For example, buy toiletries and non-perishables in bulk, join a carpool and aim to prepare your own food, instead of forking out for expensive take-aways and restaurant meals. Little but consistent savings quickly add up. Reduce the cost of running your business by reassessing your overhead – rent, electricity and salaries – and cut back on these expenses where possible.

Shop around for the best deals

Evaluate the service providers that you’re using and look for better prices. Perhaps you can save money by moving to a different mobile or internet provider, or by using a cheaper dry-cleaning service. If you’re running a business that uses specific vendors frequently, try to negotiate a better deal with them.

Sell assets

If your money is tied up in assets or stock, considering selling some to free up cash. Individuals should consider selling unwanted jewellery, appliances, sporting equipment and toys online. If your small business is suffering, reduce the amount of money you have tied up in stock by selling it at discounted prices. Pricing is important here – do some research to see what you should be asking for your goods.

Get a short-term loan

A short-term loan may provide an immediate solution to a cash flow problem, making it unnecessary to part with assets you’d rather keep. However, banks may be reluctant to authorise a loan if you have a less than perfect credit history or your business isn’t turning substantial profits.

Another option is to get an asset-based loan. In this case, you provide security for the loan in the form of an asset, such as a vehicle you own, jewellery, artwork or a luxury watch. Once you’ve repaid the loan, the asset is returned to you – and because the loan is secured using an asset, there’s no need for background checks, and you can secure the funds you need almost instantly.

For more information about securing a short-term asset-based loan to help you solve a cash flow problem, call us on 0330 341 1707 – or simply complete the application form on our site.