One of the most overlooked sources of short-term funds for a small business continues to be its network of customers and suppliers, and it’s worth thinking about how to manage those relationships from many angles. Working with them on payment arrangements can help you to shore up your cash flow when you’re facing a crunch.

“Suppliers and customers turn out to be very good sources of short-term cash, directly or indirectly,” says Lawrence Gelburd, a lecturer at Wharton and a former entrepreneur who advises small companies as a consultant.

Many small-business owners don’t think to go to a supplier and ask if they could extend payments for 30, 60 or 90 days. Sometimes a supplier will give you a discount on goods. You may want to offer to guarantee that you’ll buy a certain amount in the future.

“Suppliers want you stay in business,” says Gelburd. “They will cut you a break for now.” For example, he says, his former company went to one of its suppliers and said: “Look, we’re cash-strapped, we need the parts. But when we get the parts, we’ll be able to sell these systems, and we’ll be grateful and we’ll give you more business in the future not just based on price.” The arrangement turned out to be a win-win.

Likewise, he says, you may be able to go to your dealer network or customers that buy from you on a regular basis and say: “We’re having a tough quarter. If you buy right now, in exchange for that, we’ll give you a deal. We can extend the warranty or we can guarantee a certain price in the future.”

When looking to customers and suppliers to help your business ease a cash squeeze, keep this advice from Gelburd in mind.

  • Remember that all contracts are negotiable. “Nobody wants to take their stuff back,” he says. Your partners “don’t want you to collapse on them.”
  • Larger suppliers and customers are a better bet for negotiating new terms since they’re typically in a healthier cash position. “For them, it’s very low risk, because the amount of money is so small compared to their organization,” he says.
  • Don’t wait until you’re cash-strapped to seek out a new deal. “If you don’t need that much of an adjustment, they’re going to be better able to work with you,” says Gelburd. As is the case with a physical illness, he says, “early detection and treatment are the best options.”