Two companies can be equally short of cash for opposite reasons. Knowing whether you have a cost problem or a revenue problem is the first step to fixing the right thing.
A cost problem
If revenue is holding up but costs have crept or jumped — rising inputs, bloated overheads, expensive finance — the fix is on the cost side: renegotiate, cut non-productive spend, and restructure. Borrowing rarely helps a cost problem.
A revenue problem
If sales have fallen — lost customers, weaker demand, thinner pipeline — no amount of cost-cutting alone will fix it beyond a point. The fix is rebuilding revenue, and cost cuts must protect the capacity to earn.
Often it is both
Many difficulties are a mix. Separating them lets you attack each with the right tool, rather than applying a cost fix to a revenue problem or vice versa.
An honest diagnosis makes any conversation with us, or a lender, far more productive.
We lend only to UK limited companies and LLPs, and the loan is to the company with no director personal guarantee. As business finance outside the consumer-credit regime, it is not covered by the Financial Ombudsman Service or FSCS.
See also: How to cut costs without cutting capacity, Building a realistic turnaround plan on one page, Restructuring costs to protect your business.