California Declared Ineligible

A major commercial bank confirmed to me today that its borrowers could no longer include state of California accounts receivable as eligible collateral until further notice.

In California Cash Flow Problems, I warned of impending cash flow challenges for businesses with accounts receivable from the state of California. If other lenders should take the same tact, a major cash flow crunch could take place for any company doing business with the state or its agencies.

If you're conducting business with the state of California and borrowing against your accounts receivable, I suggest you check with your lender to see if its lending policies are being adjusted.

Doing business in another or with another state? Keep an eye on their state budget woes. This cash crunch could be playing in a theater near you.

Need help finding the right lender or telling your story the right way for your California business? Read "Matchmaking for Business Loans" and give me a call!

Tags : accounts receivable , credit crunch , California , working capital , factoring