With revenues at his six-employee construction business on track to jump 10 percent this year, to $2 million, Gary Desilets thought he’d be able to get credit pretty easily.
According to Bloomberg Businessweek, as it turns out, securing financing is harder than he expected because his trade creditors–suppliers that let companies buy now and pay later–have been scrutinizing his Bristow (Va.) business more closely.
Our mistake was believing the hype about not worrying about your debt as long as you can service it,” Desilets says. “That’s a bunch of hooey unless you’re a big company with a lot of resources.”
Only about 20 percent of the short-term credit for small businesses comes from banks. Suppliers make up most of the rest, according to the Credit ÂResearch Foundation, a trade group in Columbia, Md. Now with banks Âchoking off credit, many small companies are pressing vendors for more time to pay their bills, in effect asking for a loan to tide them over until they get paid by their clients.
To make sure they don’t get stiffed, trade creditors are taking a closer look at customers that ask for credit. They are using sophisticated risk analysis to ferret out and cut off customers who are least likely to pay their bills.
Photo by NIOSH.
Our one-of-a-kind training program allows you to successfully enter the lucrative world of commercial financing.
Unlimited income while helping others succeed. Only for the educated and qualified entrepreneur.
Amazing opportunity for only $500 in an industry that is prime for sales.
Be a part of the number one growth industry while securing your future with residual income.
What could be better than earning up to 100% commission on the sales of exciting cruise and destination vacation packages?