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CEO Tools Blog

Nov 2011 -- 12 Seasons: GET FINANCING!

Our "12 Seasons" for November is all about getting financing.  Capital, credit and borrowing are still tight, as is business cash availability.  Most big companies have already gone to 90-day-plus actual payment, and many are even quoting their purchases that way.  This puts untenable pressure on smaller companies' cash flow.  Not fair and a travesty against small-to-midsize businesses during this post-recession lethargy.

What to do about it?  Work with our suppliers to give us somewhat better payment terms without messing them up (indeed, talk to them, maybe trade price concessions for cash concessions).  Try reducing dependence on immediately available inventory (less $ tied up there) through more careful purchasing, outsourcing, or supply chain management.  And get more permanent working capital using several techniques.

These techniques include additionl/supplemental/different borrowing (try regional and local banks, supply chain financing, credit unions, and even SBA loans now available up to $5 million which are backed by one of the many trillions of "stimulus" money.  Also, private placement offerings are raising multi-millions for many companies, but expect to pay fairly hefty interest rates.  And of course there are boutique investment banking firms that can help you raise permanent or semi-permanent capital (such as Bulkley Capital -- email me for information).

If you have another idea or something you've been successful with, please let me know and I'll post on my blog next month.  As always, hope this helps you, and if you know others who are struggling with cash/capital, please share this blog-post with them.

With best regards, Kraig