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Cash Flow a Major Concern for Small Business Owners, New Poll Reveals

By Brian Lindamood, Manta Content Director - September 16, 2016

Cash Flow a Major Concern for Small Business Owners, New Poll Reveals

Among small business owners who worry about cash flow, three-quarters have missed a sales or business opportunity.

Most small business owners are concerned about their cash flow. While it may seem like a common fear that’s just part of running a business, a new poll has uncovered a troubling side effect of this cash crunch: A majority of small business owners are missing out on sales revenue as a result.

Manta’s online poll found that 60% of small business owners have worried about a lack of consistent cash flow affecting their business. Of those owners, 75% said they have missed a sale or passed on a business opportunity because they didn’t have enough cash to support the growth.

Seasonal fluctuations in business are the top cause of cash shortages, with 48% of small business owners reporting seasonality as a concern. Slow-paying customers are a challenge for 29% of small business owners, and the need to invest in inventory or supplies before getting paid for a job is a concern for 15% of owners.

When looking for solutions to make up for shortfalls in cash, 41% of business owners have used personal loans and 11% have turned to personal credit cards. Invoice financing has been used by 24% of owners, while 18% have utilized short-term business loans. Just 9% of small business owners said they have used a business line of credit to bridge gaps in funding.

What can small business owners do to more effectively manage these challenges?

Keep personal and business finances separate

091616_trends_cash-flow-a-major-concern-for-small-business-owners-chart1It may seem faster and easier to take out a personal loan or use a personal credit card to fund your business. But ultimately, you’re putting your personal credit at risk—not to mention your personal assets. Instead, take the time to build a strong business credit score so you can rely on business financing when you do need it.



Invoice financing can speed up receipts.

091616_trends_cash-flow-a-major-concern-for-small-business-owners-chart2Slow invoice payments are a growing problem for businesses of all sizes. Your customers are turning 30-day terms into 60- or 90-day payments; meanwhile, your suppliers aren’t quite as patient. With invoice financing solutions you can get paid now and let the financing company collect from your customers later, for a small agreed-upon fee.

A line of credit can bridge short-term needs

091616_trends_cash-flow-a-major-concern-for-small-business-owners-chart3You should never have to miss a business opportunity because you don’t have supplies on hand, or because you can’t afford to wait to get paid when the job is finished. That’s when a business line of credit can help: It’s flexible, short-term financing that can help you complete a project or gear up for a job that won’t pay for a while.

Cash flow fears may be a fact of life for small business owners. But with careful management and the right financial tools, you can make sure that a short-term cash crunch doesn’t cost you long-term business opportunities.

Poll methodology: Between Sept. 2 and Sept. 6, 2016, Manta surveyed 1,099 small business owners via on-site poll. The margin of error is +/- 2.84 percentage points with a 95% confidence. 

This article is sponsored by BlueVine, which provides small business owners with fast and simple invoice factoring with credit lines up to $500,000. BlueVine also provides a flexible business line of credit with credit lines up to $50,000, usually within 24 hours, with absolutely no paperwork.