Working Capital and Business Finance Mixed Signals

Business finance funding and working capital financing are producing mixed signals for commercial borrowers. Lenders are cutting or canceling business lines of credit, declining to refinance commercial real estate loans and declining new requests for working capital. At the same time, many business lenders have stated that they are now lending to businesses on a normal basis. The end result is likely to be confusion for small business owners — what matters at the end of the day is having sufficient cash flow to support the operational requirements of their business. The inability to borrow needed funds on an ongoing basis will quickly produce serious consequences for any business because very few businesses are debt-free. Commercial borrowers are likely to focus on locating new sources of capital once they realize that their current lenders might not be up to the task of helping their business financially. Regardless of mixed signals from commercial lenders, business owners should be prepared to take a more active and personal role in small business financing efforts to ensure that their business survives.