Fishing for funds during a cash crunch

Suddenly, in the midst of attempts to grow your practice, you find your cash flow dried up. And let's say your bank, no matter what you do, can't help you. What else can you do? Assuming you've taken a hard look at the potential and still feel convinced that the expansion will work, take these steps to find potential pools of cash:

1. Scrutinize your accounts receivable account by account. Try to speed up payments without looking desperate.

2. Talk to your suppliers and ask for longer payment periods. Be honest and tell them you have a temporary cash crunch and would like 45 days rather than 30 days to pay, or whatever your regular payment period has been. Most suppliers will agree, especially if you're honest and explain why you're asking for this favor. Warning: Don't go beyond your agreed time, or your creditors will grow suspicious. Rumors and gossip spread rapidly in the business world.

3. If you've been offering clients a 30-day payment period, offer a small discount if they pay you earlier.

4. As you expand, you may need additional equipment and supplies. As you place orders, be frank and tell the seller that you'd like to extend payment terms.

5. As a last resort, you may have a trusted friend or relative who's willing to lend you money. Again, this is a last resort. It's better not to borrow from friends and relatives, no matter how close your relationship may be. If you do work out a loan, be sure to sign a written, interest-bearing contract that reflects the current financial market.

Harris, a former banker and magazine publisher, is a freelance writer based in Atlanta.