For small business owners, an enthusiastic vision for smooth, steady growth can become nothing more than a mirage once company cash flow problems begin to heat up. Most will struggle with the timing of payment from clients or customers at some point, all while attempting to pay their own bills in a timely fashion. With all of the best laid plans for rapid flowing cash streams evaporating down to just a gurgle in the ditch, the potential risk of joining the ninety-percent of businesses that fail within their first three years of operation becomes a very sobering possibility.

Many of us would like to operate our companies the same way we do our personal lives. If we need a new lawn mower, we simply pull out the trusty credit card, sign on the dotted line and put off worrying about it until next month. Meanwhile, we enjoy the benefits of the new equipment, at least for the time being, without it costing a dime. Though in this way we may seek a certain gratification from owning our possessions, its really just a trick we play on ourselves. The above charge now, pay later example doesnt really convey any kind of real, initial ownership. Instead, its just a very common example of a direct loan. The credit card company facilitates a credit arrangement between you and themselves, and the proceeds of this extension are directly used and repaid by you, the borrower.

In business, however, whipping out the plastic to cover expenses is definitely not the best idea. Many have given in to this temptation, and are paying the heavy cost of damaged or ruined credit. And with that, their chances of digging out of the hole with other means of financing, which should have been sought in the first place, are slim to none.

Thankfully, there are better, specially designed cash flow tools available for businesses that are beginning to feel the scorch of the capital income desert. Many business owners are unaware of these tools. Others that are aware fail to take advantage of them. All of them would do well to at least consider the following:

Purchase Order Financing - Simply put, this tool is a loan against the future income of the business. Its designed primarily to provide the cash needed to pay suppliers and sales-generating business expenses while patiently waiting for clients to pay their invoices. Similarly, purchase order funding is utilized for the completion of existing orders by securing materials when working capital is running short. Once purchase order financing has been successfully utilized for some time, it usually becomes easier for the business to take advantage of more economical means of credit.

Equipment Leasing - With its one-hundred percent financing, preservation of credit lines, tax benefits and the ability to avoid obsolescence, equipment leasing is one of the sharpest and most efficient cash flow tools a business owner can utilize. Paying a premium in order to own equipment can be a huge waste of money. What companies profit from is the use of equipment, not the ownership. Leases can be extremely flexible to meet the custom needs of each business. Therefore, both small and medium-sized companies can greatly benefit from them.

Accounts Receivable Financing - This tool provides a line of credit secured by the companys accounts receivables. It is a strong method of financing for both short-term working funds and the permanent working capital requirements of businesses that are growing. The paperwork is considerably less involved than in more traditional types of business loans. It is also especially helpful in providing financing flexibility to firms that are growing rapidly.

Factoring - This is the sale, at a discount, of a business accounts receivables. It is not based on the companys ability to repay the money advanced. Instead, it based on their customers ability to pay what is owed. Once the factoring facility purchases the accounts receivables, they assume the responsibility for collection. It is not a loan, so neither the time in business, nor the company's debt to equity ratio are a consideration. A business has the freedom to sell only the AR that it chooses, and is not obligated to continue to do so. Factoring is an excellent source for additional working capital needed by both small and startup businesses.

The descriptions above are general, and its important to understand that there is flexibility and variation within each lender program. In order to get educated on the details of these types of tools, and to find which of them might be beneficial to your situation, talk to a professional loan broker or a commercial lender representative. He or she will explain the benefits of each, and help you decide which tools are right for keeping your business out of the cash flow wasteland.