Unless you live under a rock, you have probably noticed that there is a banking crisis. Banks are continuing to struggle with multibillion-dollar losses in real estate and are continuing to tighten-up on all forms of credit. In a recent New York Times article (‘Worried Banks Sharply Reduce Business Loans’), the Federal Reserve reported that new commercial loans have seen the largest drop since 2001.
This classic “credit crunch” is leaving many businesses with the feeling that they are without a mechanism for growth. What’s more, this could leave already cash strapped businesses out in the cold.
Financial planning in today’s economic climate is the key to ensure your cash flow is healthy. Problems can be avoided with proper planning with your accountant or CPA and implementing an immediate review of internal costs. What savings can be made? Do staff numbers need to be cut? Moreover, run credit checks on customers or clients who may be a bad risk and review whether it’s worth keeping them.
Fore many businesses, the factoring of accounts receivable can be a healthy way to “weather the storm” without incurring debt. The process is simple and straight forward; and in many cases, less expensive than a traditional bank loan. Click here to find out more about Invoice Factoring
If you run out of cash before you run out of month you’re in trouble; do it month after month and you’re out of business. Remember: Cash is king. The management of it is the secret to success.