Generating a cash shortage or outflow is easy — just let your expenditure exceed your liquid assets (e.g., primarily cash in the bank). Sure, your business may have millions in sales on the books, but since the payments from your customers aren’t due for another 60 days, you need to be able to stay in business, pay your bills, and keep turning out product until those checks arrive. See how easy it is to generate Cash Outflow?
Remember if your business sells on terms or credit, which is what a majority of small businesses do, and you are growing rapidly, you will run out of cash. It’s going to happen! No matter how big your margins are you will run out of cash. If you understand that, if you model that, you can probably get financing for it – just not at your local bank.
If Cash Outflow is the problem, then factoring with Factors Southwest is the solution. We provide Cash Inflow!