Small businesses in debt crisis
The economic crisis is continuing to take its toll on small business with many falling into a vicious spiral of debt as debtors continue to delay payments or not pay at all, cash flow specialists Oxford Funding observed today.
New data released by the National Credit Insurance (Brokers) P/L has revealed that in June 2009, claims against bad debts jumped 105 percent, with a record 131 claims made through NCI against defaulting debtors.
Rob Lamers, CEO of Oxford Funding, said it was obvious that an increasing number of Australian businesses were not able to cope with current economic pressures and were defaulting on what they owed.
“The financial tsunami has hit small business and it’s now increasingly important for them to keep a careful watch on their customers’ ability to pay.”
Lamers has urged small businesses to keep a close eye on their cash flow.
“Protecting cash flow is the most important challenge companies face. More and more businesses are looking for assistance putting proper credit structures in place, and help with collections processes that can get their cash flowing again.”
Lamers advises businesses struggling with outstanding debts to review debt repayment schedule and payment terms; invoice on delivery, and follow up outstanding invoices immediately.
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Great advice to small businesses: they must watch their expenses and not get too far behind.
We’ve noticed an uptick from both consumers and business owners looking to consolidate their unsecured debts. It’s not surprising considering the global credit crunch and the fact that the majority of small businesses in the USA are started with borrowing money from credit cards and family memebers.