One of the main problems small business owners are going to take to their bank is cash flow. If they’re not skilled in handling it, they could face a cash flow crisis. Although they may think that what they need is a loan to tide them over, you could help them explore other options first. They’ll often find they can free up funds from within their business by re-examining their business systems, and these funds might in themselves be sufficient for their immediate needs.
For example, get them to review their assets. They might have vehicles that are hardly being used, that could be sold to raise cash. Or they might have some stock that could also be sold. They could look at leasing equipment when it’s needed, instead of owning it outright and having it sit idle most of the time.
It’s also a good idea to get them to review their debtors. If people owe them money, it’s time to get tough on them and collect what’s owed. And also a good time to review their payment policies – it’s a good opportunity to tighten them up so they get paid faster in future.
So before they accrue more debt, help your small business customers manage a cash crisis by seeing what they can squeeze from the business first. Articles like the one below also make helpful reading.
Read the full article at: www.suntrust.com