Working capital is the money that’s available for your business’s use on a day to day basis. Here are five ways to access more of it when unexpected expenses crop up.

Justine runs a shoe store in her home town. She’s the organised type and always pays her bills on time, checks her inventory regularly and keeps a keen eye on cash flow.

In the lead up to Christmas a series of unexpected events took place – wet weather destroyed the Christmas stock, the POS system failed and the store manager quit. Justine was out of pocket and all of her Christmas plans fell by the wayside.

Justine’s story is not uncommon. Even when steps are taken to ensure ample stock, staff and surplus cash are on hand, unexpected things can happen that wreak havoc on working capital. That’s why small businesses often need financial assistance to manage their cash flow.

Here are five ways to access working capital when your business finds itself in a cash flow hole:

1. Bank overdraft

A bank overdraft is a really easy way for a small business to access credit to manage working capital. One of the main benefits of this kind of loan is that you will only pay for the interest applicable to the amount of money overdrawn. The interest rates on a bank overdraft are generally about one to two per cent more than the standard interest rate.

2. Small business loan from an alternative provider

Alternative lenders are a good option for businesses that aren’t able to access finance from a traditional institution. These lenders have more flexible lending criteria and the loans generally come with a fixed interest rate. Some platforms offer an unsecured line of credit, which means you no longer need to have property or assets to borrow against.

3. Equity funding

Equity funding generally means investment from friends or family or even home equity loans. This is a great option for businesses in the early growth stages. The benefit of an equity loan is that the business doesn’t need to have a solid financial history to secure this kind of credit.

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4. Factoring or advances

Factoring is a financial transaction where a company can sell invoices to a third party to meet its immediate working capital needs.The value of a factoring loan is based on future credit card receipts and is therefore only appropriate for businesses which accept credit cards.

5. Trade creditor

Often suppliers will offer a trade credit facility or a loan when you place bulk orders from that company. The supplier will generally conduct an extensive review of your company’s credit history before providing the loan so a good financial history is required.

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With so many options available to help small businesses manage working capital, it doesn’t make sense for SMEs to turn to their own personal resources to meet their financial needs anymore. A working capital loan can help you handle any financial concerns that may arise, leaving you free to continue business as usual.