We are now seeing the economy recover, big corporations continue to address their cash flow difficulties by postponing payments to small business vendors. At the same time, vendors to these same small businesses continue demanding for quick repayment. The result = cash flow being pushed and pulled making small businesses go out of business.
This cash flow hold-up strategy by bigger companies is grounding the small businesses cash flow. Due to the fact small businesses have got little bargaining room when buying and selling to larger clients, they are often forced to accept more extended repayment terms.
This problem creates another: Vendors (many in a cash-crunch them selves) want you to pay on shorter terms if not faster repayments. This is creating a horrible cash-flow crisis cycle from customer to supplier to vendor, pressing many small businesses to the edge of cash flow disaster.
To add to the fire, we are in a credit crunch mess from the housing impact, bank lending to small and mid-sized businesses has persisted to dwindle. The Small Business associations own data states that from June 2009 to June 2010, the value of outstanding loans to U.S. smaller businesses stepped $43 billion, a drop of more than 6 percent. This lack of lending has had a devastating impact on small businesses that were already strapped for cash, putting many of them out of business.
As business owners are struggling with cashflow during this economic recovery, companies like Neebo Capital seem to be scarce. Having said that, Accounts Receivable Factoring is often overlooked cash flow solution to help small businesses manage their cash flow. This form of funding also known as Factoring invoices is a financial tool that allows small businesses to take advantage of the power of their outstanding Accounts Receivable. Factoring is a valuable cash flow solution to turn a business’ invoices into instant cash, allowing them to fund small business operations.
Factoring firms such as NeeBo Capital supply cash flow to small businesses that have Accounts Receivable. Most invoices charged to credit worthy clients qualify.