Cash-flow crisis action plan

First, get a clear-eyed picture

A cash crisis feels like an emergency because the numbers are usually fuzzy. The first job is to replace panic with a figure. Before you do anything else, build a short-term cash-flow forecast covering the next 13 weeks: opening bank balance, certain receipts, and committed payments, week by week. The point is to find the exact week cash runs out and how big the gap is.

Work in confirmed numbers, not hopeful ones — invoices actually due, not sales you might win. A cash-flow forecast template gives you the structure. Once you can say "we are £18,000 short in week six", every later decision gets easier, because you are solving a defined problem rather than a feeling.

Stage 1 — Quick internal wins

Start with the levers entirely in your control, because they are the fastest and cheapest. Work down this list:

• Pull cash in. Invoice everything unbilled today, not at month-end. Chase every overdue debtor by phone, oldest first, and offer a small early-settlement discount where it frees real cash.
• Pause discretionary spend. Freeze non-essential purchases, recruitment, subscriptions and projects that can wait a quarter.
• Sweep idle assets. Sell surplus stock or unused equipment; convert dead inventory back into cash.
• Time outgoings. Move payments to their genuine due dates rather than paying early, without breaching terms.

Tighten the habits that caused the squeeze while you are at it — the credit control checklist stops late payment quietly draining cash again next month.

Stage 2 — The conversations that buy time

Once you have done what you can alone, talk to the people who can ease the timing. Handled early and honestly, most react far better than directors expect — a quiet renegotiation now beats a missed payment later.

• Key suppliers — ask for extended terms or a short payment plan; protect the relationships you depend on. See supplier payment terms.
• HMRC — if a VAT, PAYE or Corporation Tax bill is the pinch point, a Time to Pay arrangement can spread it. Contact them before the due date, not after.
• Your bank or lender — discuss a temporary overdraft increase or a payment holiday on existing facilities.
• Major customers — for a confirmed order, a deposit or stage payment can bridge the gap.

Stage 3 — Bridge the remaining gap with finance

If a real gap survives the first two stages, that is the moment to bring in outside funding — to bridge a genuine timing mismatch, not to paper over a structural loss. Match the product to the gap:

• A revolving facility like Credicorp Flex suits a fluctuating shortfall you draw on and repay as cash returns.
• A short-term business loan suits a defined, one-off gap with a clear repayment path.
• Invoice finance unlocks cash already tied up in your debtor book — model it with the invoice finance calculator.

Speed matters in a crunch, so it helps that Credicorp lends to the limited company with no personal guarantee and decides quickly. Check the repayment fits your recovered position first with the affordability calculator — borrowing into a loss only moves the problem.

Stage 4 — Stabilise so it does not recur

Surviving the squeeze is half the job; the other half is making sure the same week does not arrive again. Once cash is stable, hold a short review: what actually caused it — a single late payer, a seasonal dip you should have seen, thin margins, or over-fast growth eating working capital? Fix the root, not just the symptom.

Then build a permanent buffer target and keep the 13-week forecast as a living document you update weekly. A weekly cash dashboard turns this into a five-minute habit. This is general guidance for a cash emergency, not financial or insolvency advice — if the business cannot meet its debts as they fall due, take professional advice promptly.