Running low on cash is one of the most stressful positions a founder can be in – and one of the most common. The problem is rarely that the business isn’t working. More often, it’s a timing issue: money is owed, growth is happening, but the cash isn’t landing when it needs to.

The good news is that cash flow problems are almost always solvable if you move early enough. Here are five practical steps to stabilise your position and extend your runway.

Build a Rolling Cash Flow Forecast

If you’re not running a rolling cash flow forecast, you’re navigating without a map. A forecast doesn’t just tell you how much cash you have now – it tells you when you’ll hit a problem, which gives you time to do something about it before the situation becomes critical.

A useful forecast maps every expected inflow and outflow week by week or month by month for the next thirteen weeks at minimum, and twelve months out at a higher level. Include payroll, PAYE and VAT obligations, rent, software costs, and any loan repayments. Then map your expected revenue receipts – not when invoices are issued, but when payment is actually expected to land based on your customers’ payment behaviour.

The gaps between those two lines are where your cash flow problems live. Identifying them three months in advance gives you options. Identifying them three days in advance doesn’t. Update the forecast every week – a forecast that isn’t maintained becomes a false sense of security.

Tighten Your Payment Terms and Chase Receivables

Long payment terms are a slow bleed. If you’re invoicing customers on 60-day terms and they’re paying at 75 or 90 days, your cash position will deteriorate steadily regardless of how healthy your revenue looks on paper.

The first step is to tighten standard terms where you can – 30 days is increasingly standard and most customers will accept it with minimal pushback if you make the change clearly. Invoice promptly on delivery rather than at month end, and set up automated payment reminders before invoices become overdue rather than only chasing after the fact.

Where customers are large organisations with rigid payment policies that can’t be shortened, invoice finance is worth considering. UK invoice finance providers including Bibby Financial Services and Aldermore will advance a percentage of the invoice value – typically 80-90% – as soon as the invoice is raised, with the balance paid when the customer settles. The cost is a percentage of the invoice value, but for businesses with significant receivables tied up in long-payment-cycle customers, it can transform the cash position materially.

Use HMRC Tools to Manage Your Tax Obligations

Two HMRC mechanisms that UK startups regularly underuse when cash is tight – and that can each make a meaningful difference to your near-term position.

R&D tax credits: If your startup is carrying out qualifying R&D activity and you haven’t yet claimed, or haven’t claimed recently, an R&D tax credit claim can generate a significant cash repayment from HMRC. The SME R&D relief scheme allows eligible companies to claim a payable tax credit even when loss-making. Claims for the prior accounting year can be submitted up to two years after the period end – meaning there may be cash sitting unclaimed that you can access relatively quickly. If you’re not sure whether your activity qualifies, it’s worth getting an assessment before ruling it out.

HMRC Time to Pay: If you’re facing a VAT, PAYE, or corporation tax payment you can’t cover, HMRC’s Time to Pay service allows you to spread the obligation over an agreed period. Most arrangements are approved on the phone and can be set up in a single call. There’s no formal application, no impact on your credit file, and HMRC’s default position is to work with businesses that contact them proactively. The worst outcome is that you delay the call until the payment is already late – at which point penalties have already accrued.

Cut Strategically Rather Than Broadly

When cash is tight, the instinct is to cut across the board. The risk with that approach is that you cut things that are generating revenue alongside things that aren’t, and end up with a smaller business rather than a more efficient one.

Start with a granular review of your cost base – particularly subscriptions and software, which tend to accumulate unnoticed in fast-growing teams. Tools that aren’t being actively used, licences that haven’t been reviewed since they were first purchased, and duplicated functionality across multiple platforms are all common sources of recoverable spend.

Beyond software, the most impactful cost reductions are usually in headcount timing and office commitments. If a hire is planned but not yet made, deferring it by a quarter can extend runway meaningfully without affecting your current team. On office costs, the shift to hybrid and remote working has made this more negotiable than it’s ever been – speaking to your landlord about a temporary rent reduction or early break clause is worth attempting before assuming the cost is fixed.

Avoid cutting customer success, support, or product quality – churn caused by a degraded customer experience costs more to recover than the savings generate.

Explore Non-Dilutive Funding Before Raising Equity

If your runway is genuinely short and internal measures aren’t moving the needle fast enough, bridging capital is often necessary. But not all bridging options require giving up equity.

The British Business Bank operates several schemes accessible to UK startups including the Start Up Loans programme (up to £25,000 per founder at a fixed interest rate) and the Recovery Loan Scheme for established businesses. Innovate UK offers grant and loan funding for innovative businesses across a range of competitions – the timelines are slower than commercial finance, but the capital is non-dilutive and carries genuine credibility with investors.

For startups with predictable revenue, revenue-based financing through UK providers like Clearco or Capchase can provide immediate capital that repays as a percentage of monthly revenue – no equity, no fixed repayment schedule. And if you’re approaching the next equity round anyway, a Convertible Loan Note from an existing investor or angel can provide bridge capital that converts at the next round rather than requiring a full equity process.

None of these are a substitute for addressing the underlying cash flow mechanics. But they can buy you the time to do that properly – and time is almost always the most valuable thing when cash is tight.