Your credit score represents your credit worthiness, which comes to play if you need a bank loan or other financing services. Whenever customers apply for a credit card, get a loan or take out a line of credit; creditors most likely review their credit report to determine whether they're a good or bad credit risk. A higher score indicates the customer is more likely to pay on time and continue paying until the loan is paid.
One of the more difficult tasks of owning a business is chasing down late payments. A business needs to have cash to make payroll and pay expenses. One way to deal with this is to look into a bank loan, but that adds debt. With some foresight and planning, it's possible to reduce late payments.
Before you read The New York Times article, see if you can guess the answer to this question. What year saw the highest gasoline prices (adjusted for infation) ever recorded in the US? That year was so bad that the US instituted "Gasolineless Sundays" to encourage people to drive less.
I like this The Globe and Mail article because it explains how a successful small business can find itself struggling with cash flow as it takes on more and bigger projects. The company in the story is an event management business with nine employees and a 2010 revenue of $2.7 million.
You've probably heard from sources like FDIC that for the first time in three years, bank lending increased. However, bank loans to small business keep dropping. Yet, one bank boasts that its lending to small- and medium-sized business has gone up higher than the industry average of less than a 3 percent increase.
One of the more popular tips given for managing mail is to trash, file or take action as soon as you pick it up. The same applies to business expenses. Come tax time, you'll be ready and have less to do when you track expenses as they come in instead of letting them pile up and then trying to pull it together.
In 2007, Mint.com launched to help people manage their financial accounts in one place online and on mobile devices. Users value the service because it supports their budgeting and planning efforts.
Mint grew its customer base to over six million users. Since then, Intuit acquired Mint. Despite all these resources, customers needed one critical feature to avoid fees – bill reminders. Mint reports that its users spend $5 million a month paying bank fees. That's a lot of cash flow.
One of the most challenging aspects of running a business is managing cash flow. Thanks to climbing costs, this is especially true today. A business owner can do a great job in consistently maintaining the money deposited into the bank account and paying expenses and employees. Yet, it can run into something like a damaged roof that can throw cash flow out of sync.
A profitable company can fail simply because it doesn't have enough cash. Often, the cause isn't striking a balance between what comes into the business and what goes out of the business. A profitable company can fail because it has to continue paying employees, bills and vendors in spite of not enough cash coming or fast enough.
As you read this article, you'll notice no mention of increased loan flexibility to small and medium sized companies. If you're struggling to get a loan from a bank or they're taking too long to reply, please contact us for Plan B ideas.
What Our Clients Are Saying
- Brenda and Mark Neufeld,
In our very first conversation I noticed that you not only understood our situation, but also the Oil & Gas trade. Capital Solutions has been an invaluable help... We have grown our business exponentially thanks to you. I can now probably qualify for a traditional line of credit (...but I'm not sure I want to).
B.N.M. Piloting Services
- George Del Toro,
We were funded [in 10 days] (the approval process was very smooth). The way I spend my time has changed dramatically since then. I can spend as much time as I need visiting with customers and out on the field... In closing I would like to tell you that Capital Solutions has made it possible for GDT Well Service, Inc. to triple (300%) its business in the last year, without any of the "growing pains".
GDT Well Service
- Keri Gray,
The HUGE difference I found since we are working with you... is in the day-to-day life... Since Capital Solutions is funding us there is no "fear"... when I talk to a vendor or need to make payroll. You guys have also bent over backwards... to make it work for us. I really appreciate that.