Use working capital financing for cash gaps
Wilson explains that as a company grows it consumes cash in daily operations regardless of its profits, which is called working capital. His example is a product business that looks profitable on paper but must wait 60 to 90 days to be paid. He says banks and finance companies lend against purchase orders and inventory, usually through lines of credit, and that even software companies can face such a squeeze.
“Banks will not loan 100 cents on the dollar of working capital.”— Fred Wilson, Financing Options: Working Capital Financing, Aug 2011
Do this
List this week what customers owe you, your inventory and what you owe suppliers, then ask your bank what a credit line against them would cost.