Startup funding. It’s kind of a big deal.

Most entrepreneurs know that it takes more than blood, sweat and tears to launch a business. Cash—or lack thereof—is a major factor that can make or break your chances of creating a viable business. Even the smallest businesses require some capital to get started and, aside from the independently wealthy, almost all entrepreneurs will need to secure capital to fund their big idea.

If you find yourself stressing about cash flow, know that you’re not alone. The number one reason most startups fail? Inadequate cash reserves. A whopping two-thirds of businesses fail in the first two years due to cash flow problems. It’s no wonder why 50% of founders opted not to pay themselves a wage one or more times in the past year.

Fear not, founders. There are many, many scrappy ways to get cash for your business. 

The most obvious way is to raise capital from investors. But the venture capital route isn’t for everyone. Here are some of the pros and cons to consider when it comes to bootstrapping vs. venture capital. 

For those who are bootstrapped and want to continue on that path, there are other ways to fund your business—especially if you’re in need of startup funding in a pinch. Here are three (plus a bonus!) ways to get the capital you need to reach your short-term and long-term business goals.

Home Equity Line of Credit

Even if you don’t anticipate needing to fall back on this funding option, it’s a good idea to max out the availability on your home equity line ahead of time. Typically, a bank will loan a certain percentage of your home’s value. We recommend all founders take out home equity loans at the 80% of home value.  Try to do this before you start your business because most banks don’t understand anything except a W-2 unfortunately.

Even if you don’t use it, it’s a great emergency cash flow vehicle. You can expect this process to take anywhere between 45 and 60 days.

401(k) Over IRA

If you have a retirement account you can rollover and you are trying to figure out to decide which type of retirement plan to put in place for your business, it might be good to pick a 401(k) which allows for loans. Unfortunately, you can’t borrow against a Simple IRA. Since withdrawing the money is so punitive (thanks IRS), 401(k)s can be designed to allow you up to $50,000 of borrowing capacity for your business. Guideline has a cost effective setup for startups (around $500) just make sure to allow for loans to be able to have access to that capital (50% of the balance you rollover or $50,000, the lesser of). 

Working Capital Actions

Working capital refers to the cash used in a business’s day-to-day trading operations. There are plenty of ways to actively improve the working capital of your business. A few examples:

• Invoicing: Getting your customers to pay on time, or early, should be a top priority for business owners. We recommend adopting two techstack partners: Collbox and InvoiceSherpa to help you automate your accounts receivable and get paid on time. We also offer accounts receivable management services for business owners who need to track down late payments but don’t want to sacrifice the relationships they’ve built with their customers. We take on the responsibility of having those awkward conversations.  
• Stringing Out Accounts Payable: You have to be careful but sometimes it is necessary to string out your payables for a few extra days, you do start to risk relationships after about 15 extra days but that could be enough to help with one payroll cycle. We use Bill.com to make sure that we’re not paying invoices until the due date to keep as much cash in the bank as possible. 

BONUS: Personal Funding Sites

Our team also tested popular personal funding sites like Lending Club, Prosper, OnDeck. While they all had easy and painless application processes, we don’t recommend those facing a funding time crunch to go this route. The process took two weeks total from the time of application to funding. These sites also charge all origination fees upfront and Lending Club and Prosper require founders to take out personal lines rather than business lines (where OnDeck comes into play). 

We are always on the lookout for new and viable funding opportunities for our customers and recently tested Kabbage to see how the economics work. Our experience? The application was easy and it took a total of three days to get funded. We applied on a Saturday and got funded that Tuesday. While the interest was fairly heavy over the term of the deal, they are much lower upfront then Lending Club, Prosper, and OnDeck.  You can’t beat the turnaround in a crunch. Our pro tip is that if you need one or two months of cash, definitely apply for the 12-month loan instead of the 6-month loan, less interest rate in the first two months and no prepayment penalties.

For reasons both good and bad, things get tight sometimes when you’re running a business. Welcome to entrepreneurship. If you need help navigating your startup funding, or with startup financing in general, know that we’re here to help. 

As always, we’re happy to connect you with one of our CFOs to talk through things, or you can go ahead and book free CFO Office Hours.