About 35 percent of
small employers report that cash flow is less of a
business problem than it was three years ago. Still, about a quarter of small
business owners report that cash flow is more of a problem than it was three
years ago. About 40 percent experienced no change.
About one-in-five (19%)
small employers find cash flow a continuing or common problem in operating
their business. Cash flow is an occasional problem for 43 percent of owners and
38 percent are not negatively impacted by the issue. A plurality of small
business owners blame the difference in timing between expenses and receivables
for cash flow problems.
report regularly stepping up efforts to collect receivables when confronted
with a cash flow problem. Small employers also find this strategy the most
important action they usually take to improve cash flow.
Of those who borrowed
money to resolve cash flow problems, the majority borrowed from a bank.
Sixty-eight percent of small employers borrowed money from a bank compared to
19 percent who borrowed from another type of financial institution such as an
investment firm or a credit union.
Of the population who
borrow, 56 percent borrowed from a bank in the last 12 months (Q#14) and 6
percent looked into financing options from a non-traditional lender such as a
crowd-sourcing company in the same time frame. Interest in non-traditional
lenders was most popular among businesses in the 1 to 9 employee category.
Another popular tool for small business
owners in managing cash flow is a credit line from a financial institution.
Over half of small business owners (56%) have an open credit line that they use
for business purposes.
Forty-six percent of
small employers describe their sales as spread fairly evenly throughout the
year. Thirty-six percent of small employers experience sales that are lumpy
over a 12 month period with scattered strong and slow periods. And about 8
percent report their sales as concentrated in one calendar quarter of the year
and another 9 percent have sales largely occurring within a period of six