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  Businesses experience unexpected financial hiccups. It’s something you should expect as an entrepreneur. Whether it’s a sudden drop in sales, an unbudgeted-for expense, or national events affecting cash flow, securing fast emergency funding can be the lifeline that ensures business continuity. Here are some effective steps to help you navigate the process of obtaining emergency funding swiftly.
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Determine Your Needs

Before seeking out emergency funds, pinpoint the reason for the financial shortfall. Is it a temporary blip or indicative of a more extended downturn? Take a quick inventory of your current assets, liabilities, and expenses to determine exactly how much funding you need.

Turn Your Assets into Cash

If possible, and only as a last resort, consider liquidating personal assets. This is not ideal, as there could be long-term repercussions on your personal finances, but it can offer an immediate solution. Just do what you can to patch the holes it opens up as soon as conditions get better.

Go for Quick Loans from Non-Traditional Lenders

These days, many financial institutions offer short-term business loans designed for immediate needs. These loans typically have a shorter repayment period and might carry a higher interest rate but can be approved within 24 to 48 hours. You could try raising funds from some of the more solid neo-banks which have relatively decent repayment terms.

Consider a Business Line of Credit

A business line of credit allows you to access funds up to a certain limit. You only pay interest on the amount you use, making it a flexible option for emergencies. Speak with your preferred lender to find out their requirements for a line of credit, and whether the product matches your needs.
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Access Invoice Factoring 

If unpaid invoices are causing a cash flow strain, consider invoice factoring or financing. This allows you to sell your outstanding invoices to a third party (the “factor”) at a discount, providing you with instant cash. There are a number of platforms and institutions that offer invoice factoring services in Nigeria.

Leverage Business Associations

Organizations such as your local Chamber of Commerce or industry-specific associations can be invaluable during crises. They can provide guidance, and resources, and even introduce you to potential lenders.

Keep Communication Lines Open

Whatever you do, make sure to maintain trust with your business’s stakeholders. Whether it’s your employees, vendors, or customers, open communication about your financial situation can build trust. Vendors who have you in their good books might extend payment terms, and loyal customers might pre-purchase goods or services if you suggest to them to do so.
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Final Words

Facing a financial crisis can be daunting for any business owner. Thankfully, there are a variety of resources and strategies that can help bridge the funding gap. If you explore the options we’ve talked about here, you can navigate your pressing financial challenges and place your business in a prime position for growth going forward. However, you can join the Connect Nigeria Club Connect to gain access to all the funding information necessary to accelerate your business. Featured Image Source: Fund Quest
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This article was first published on 30th August 2023 and updated on September 6th, 2023 at 4:25 pm

ikenna-nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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