What do small businesses really need in this flagging economy? Any one of the 28 million small businesses in this country can readily give an answer. It might be a good idea for Congress to listen in because they do not have a clue. The answer: good ol’ fashioned cash flow to see them through the next several months.
It apparently required a formal investigation by the U.S. Small Business Administration (SBA) to glean this obvious fact starring us in the face. According, a survey released a couple of weeks ago (with statistics from September of 2009) revealed businesses with cash-flow problems rose to 60 percent from 57 percent last April. This was up from 55 percent in September 2008.
As is well known, cash-flow has become a paramount concern for our small businesses. Fortunately there is a short term cure for this ill, in the form of SBA small business loans which are geared to providing such cash flow needs. It is a loan program in which lenders are actually making loans currently: the Community Express Loan Program. This gives unsecured small business loans between $5,000 and $25,000 with very little paperwork, answers typically in 3-5 days, interest rates presently at 7.75{421b746ef4f4588dfd87c8acf16c9c4b10a4a0127eaff1927a04f4091b6d6d60}, only $60 per month per $5,000 borrowed, funding in two weeks , and monies wired directly to your business account. There are still lenders participating in this program.
Here is a common example. ABC Company is a telecommunications consulting firm that represents medium-sized businesses. A project typically takes 3 to 6 months with monthly billings. To complete contract requirements, a staff 3 to 6 independent contractors are necessary and, of course, they expect to be paid at least once a month–on time. Because of the economy, ABC is now awaiting up to 90 days for their payment when in more robust years payment was within 45 days. This means the Company must advance their own cash and therein lies the problem. Frankly they have to live with this situation because receiving these contracts is competitive and they have no choice.
Traditionally, ABC would be required to go through the rigors of a larger SBA line of credit taking weeks of delay and pounds of paperwork. But the SBA Community Express loan programs requires very little paperwork and mercifully can usually be accomplished within 10 days. It is a welcome relief for the temporary expediency of keeping the doors open for future projects.
The bottom line: stay in business for the next year or so and hopefully when the economy rebounds, you will have the corporate contacts and track record to be first in line when companies begin to expand and really need your services. Good luck.