Running a business in the modern environment is not for the fainthearted. There are so many changes happening today mostly affecting small businesses. These changes include changing customer expectations, increased competition due to a globalized market, disruptive technology and increasing operational costs. According to a 2014 Fortune Report 90% of startups are in danger of failure, which is a worrying situation.
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One of the main reasons why these businesses are collapsing is of course due to cash flow problems. In fact, a U.S Bank Study has revealed that 82% of these businesses collapse because they cannot sustain operations due to cash flow problems. A study aired on CNBC lists financial problems as the main cause of small business failure. In most cases, the debt burden becomes too heavy to manage and investors are left with no option but to fold up.
But should this be the case? Considering that small businesses account for 99.7% of all U.S business, there should be a solution to solving the cash flow issues. Of course most businesses have now resorted to loans to offset cash shortfalls.
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This means these enterprises have multiple debts to deal with, which can prove to be tricky. Most small businesses which have collapsed or declared bankruptcy have been dragged down by unmanageable debt. Not only can debts ruin your investment, the persisting bad credit profile will alsohinder any chances of getting affordable credit from the market.
In essence, dealing with multiple loans will very effectively allow your business to stay afloat and attain a healthier financial status.