Managing Cash Flow and Business Credit for the Holidays

By on December 9, 2015
Last month I hosted a tweetchat for nav (@navSMB on Twitter). The company was founded in 2012 with a mission to help millions of small business owners navigate the complex world of business credit and finance, so they can confidently create the business of their dreams. The topic was “How should small business owners manage cash flow and business credit for the upcoming holiday?” Below is a summary of our conversation. You can also find a Storify Board of the discussion here.

Brian Moran: What is cash flow?

nav: Simply put, cash flow is the journey of financial assets into and out of your business. Cash flow is good indicator of your business’s financial health; the numbers don’t lie.
Brian: What are the biggest issues you see in cash flow management among small business owners?
nav: Creating short term and long term cash flow strategies can seem daunting at first. Expecting revenue tomorrow to be what it is today. You need to plan for shortfalls. Clients/customers who don’t pay as well as fraud can cause unexpected crunches.
Brian: What can small business owners do now in response to these issues?
nav: Create cash flow statements to help gather info about revenue and expenses over a period of time. Get financing in place (business credit lines or cards) before you need to use it. Monitor the business credit reports of your customers to know who with whom you’re dealing.
Brian: What’s the best way to handle cash flow crunches for the holiday season?
nav: Utilizing the right financing products can help you smooth over cash flow gaps. Keep cash flow statements to help you better predict cash flow trends next year. You can learn more about cash flow by visiting our blog.
Brian: What are the best business financing products to manage cash flow?
nav: Business credit cards are an easy way to access funds for short-term cash flow gaps. Credit lines usually offer reasonable rates and can be spent on anything your business needs. More importantly, your business can get approved for larger credit lines by maintaining strong business credit scores.
Brian: What are the benefits of using a business credit card?
nav: A business credit card gives you fast access to revolving capital and you only use the amount needed. Browse business credit card options with nav. Credit cards usually offer rich rewards for small biz owners, including cash back or travel. Paying on time can help build a business credit profile which is separate from your personal credit. You get 30 days to pay; if finances are stretched thin, you have extra time to pay.
Brian: How can you make sure you qualify for financing with the lowest rates?
nav: Poor personal and business credit scores are the main reason financing gets denied. The easiest way to qualify for the best financing available is to maintain strong personal and business credit scores.
 

Brian: What are the dangers of using a personal credit card for business expenses?

nav: Maxing out personal cards can kill your personal credit scores. You are likely to get approved for more funding if you apply as the business. The first thing all business owners should do is separate personal and business finances.
Brian: Why is it vital to always pay business vendor and credit card bills on time?
nav: Not paying your business bills on time hurts your business credit scores. Bad business credit scores make it harder to get financing next year. With business credit, even being a few days late can affect your scores.
Brian: What are some outside-of-the-box tips for managing cash flow?

nav: Ask vendors for extended payment terms (net-30 or 60). Getting their approval typically requires a strong business credit score. Do your vendors offer discounts for early payments? Lastly, pay your vendors bills with a credit card on the due date to free up cash for an extra 30 days.

Brian: Thank you for so many great takeaways. I’m sure the small business owners reading our discussion are taking lots of notes on how to prepare for the upcoming holidays. We look forward to continuing the conversation with our tweetchat in December.   

 

 

About Brian Moran

Prior to rejoining the world of entrepreneurship, Brian was the Executive Director of Sales Development at the Wall Street Journal where he oversaw the sales development and marketing programs for the financial and small business categories among the many Journal brands. From 2002-2010, Brian was President of Veracle Media and Moran Media Group.

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