Monday, July 16, 2007

Five Big Burdens of Business Ownership says that cash flow is one of the five big burdens of business ownership.

The company serving as the poster child for the cash flow headache is none other than the makers of Penagain, Pacific Writing Instruments. I wrote about Penagain after reading about their cash flow challenges last November.

"You can be a super-successful company, have a great product distributed all over the place, be profitable and still go out of business because of cash flow," Ronsse says. "You have to have quick access to capital. Nothing else matters if you can't pay your bills."

Fast growing companies often suffer from cash flow problems and find extreme difficulty in attracting traditional banking sources of working capital. The growing company needs a lot of money and often fast!

Purchase order financing and factoring are two forms of asset based financing that can prove very beneficial to the cash flow of fast growing companies. These financing solutions depend more about the creditworthiness of your customers rather than the credit strength of the company needing to borrow money.

Don't overlook these financing solutions just because they might cost a bit more than a bank loan. They're still both cheaper than bringing in equity.

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

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