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All signs point to this uncomfortable truth: small business owners are less likely to get a loan for the capital they need to grow their business than six months ago. As quoted in CNN Money.com, Ben Bernanke, Federal Reserve Chairman, said in a speech at the Economic Club of New York, “The fraction of small businesses reporting difficulty in obtaining credit is near a record high, and many of these businesses expect credit conditions to tighten further.” Even established small businesses are seeing their credit lines evaporate under the more restrictive conditions. This chart from CNN Money.com clearly shows banks pulling back from small business lending even after TARP.
Small B2B businesses must move quickly to find solid alternatives to traditional lines of credit or term loans. Putting their receivables to work is a strategic solution for a small business. Receivables, typically a company’s largest asset, can be collateralized with the increased liquidity allowing the business to continue growing. Receivables financing is the new black.
Fraud, which includes employee fraud, is up an astounding 43% for fiscal 2008 – 2009, according to a poll by the Security Executive Council as reported in the Harvard Business Review. It’s not surprising when you think about the number of people who are feeling an economic pinch or are concerned that their job is at risk.
All business are under pressure to cut costs and are hesitant to invest in security. Consider the plight of small to medium sized business. These businesses are laboring under cost containment pressures and at the same time are most vulnerable to the risk of fraud. For a medium sized business, employee fraud can be devastating and put the business at risk.
Now might be the time to focus on investing in cash management best practices such as a lockbox for your cash receipts.