Short Term Solutions A new venture can become cash short if it begins to succeed too quickly. A large order for a young company places a heavy burden on the firm to purchase materials, commit resources and take on employees well in advance of receiving any cash. This occasion usually prompts the entrepreneur to visit the bank and look for interim 0r bridge financing. Unfortunately, since there is little in the way of a track record, most bankers are likely to turn down the request.
In some instances the firm, having been in operation for some period of time, may be able to get a line of credit, an operating loan or perhaps floor planning to carry merchandise or inventories. It is also not unusual to ask the customer for an advance or prepayment for the goods she or he may have ordered.