Small Business

Why Small Businesses Are Struggling With Cash Flow

Six in ten small businesses regularly struggle with cash flow, according to the QuickBooks State of Cash Flow Report. As a result, 32% of those small business owners have been unable to pay themselves, employee payrolls, vendors or loans within the last year.

What is the primary cause of these cash flow struggles?

It’s not a lack of funds. It’s a lack of available funds. One third (33%) of respondents said they had over $20,000 in outstanding receivables. The average small business in the United States has $53,399 in outstanding receivables.

Cash flow is a huge problem for small businesses, especially sole proprietors. (Getty)Getty

Two-thirds (66%) of business owners say a delay in payment processing is the biggest obstacle to their cash flow. The remaining 34% say their issues come from not getting paid by customers. It takes an average of 29 days for small business owners to get paid by their clients.

To combat cash flow issues, many small business owners turn to loans. In fact, 61% of respondents said they have applied for a loan for their business. Sole proprietors–entrepreneurs with no employees–are less likely to apply for loans than companies with employees: 71% of sole proprietors have never applied for a business-related loan, compared to 39% of businesses with 1-49 employees.

Provided by LowCards.com

Source

neallesh@yahoo.co.uk

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