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How to bridge a 2 month gap before your next check?

I am almost a year into my bootstrapped startup and I am about to run into my first financial hiccup.  I have a good deal of money expected in a large payment in 2 months but will run out of money in the next few weeks.  What are my options for finding the small amount of money I need to get to that payment?

 

  • Uber, postmates, temp job, odesk, sell stuff on Craigslist, seeking arrangement… Hustle or whore. You should know this.

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  • Try a venture bank, venture lender or factoring (i.e., selling the invoice forward). If it’s not an invoice, there are lenders who will “hypothecate” , i.e., advance money on forthcoming payments.

    There are several financing options available for all amounts, provided you can verify incoming payments (it doesn’t have to be a contract).

    You’ll probably pay a 4% fee and interest for the carried balance (the advance varies from 70% to 90% of the receivable).

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    • Thank you! This is what I was looking for. I’m going to look into this further. Are there any banks you would recommend?

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      • I found that I am able to borrow money for a 60 day period without any penalties from an existing IRA as long as it’s paid back in full in 60 days. Plenty of time to get me to that payment! Thanks everyone.

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  • I have this problem too and I also have terrible personal credit from mistakes made in my twenties, so I can’t even get credit card debt. My family is poor and so is my romantic partner so I can’t borrow money from anyone close. I’m doing a little contract work to try to make ends meet but it’s really fucking dicey. I really do not know what I’m going to do.

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  • You could also try providing a financial incentive for the other company to accelerate payment – e.g. Some percentage off. You’ll get less cash overall but you’ll get it now. Don’t do this if you’re expecting a repeat stream of business from this client unless you are willing for this to be the norm with this client.

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  • Avoid a loan if you can. It’s a bloodsucker. I’ve had them. Borrow from friends, sell something or consult.

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