ProcurementAlert.com » small business

Payments have slowed, but most small businesses are coping

Charlie Walker — Wed, 21 Jan 2009 14:00:52 +0000

The past several months have been a rough ride for small businesses, and the survivors are hanging tough.

Much of what you’ve suspected is being confirmed as reality:

Of the small businesses that offer credit, 52% say customers are paying invoices more slowly than they were a year ago, and
24% of those same businesses report that they are slower to pay their own creditors.

Of course, these trends have initiated ripple effects through virtually every aspect of conducting business.

Purchasing and Procurement people are more likely than most to feel the squeeze.

According to Decision Analyst’s Small Business Recession Effects survey of companies with less than 100 employees, the good news is that conditions aren’t worse for small businesses.

For example, while 23% of small businesses say there’s not enough credit available for them, there are 77% of small businesses that are comfortable with available credit levels.

Small businesses were asked what steps they plan to take in the next three months to help reduce expenses.

Among the answers:

Reducing supply orders: 29%
Holding off on buying equipment: 23%
Switching to less-expensive suppliers: 20%
Increasing prices: 17%
Reducing inventories: 16%

Big Brown offers big hand for little guys

Charlie Walker — Thu, 23 Oct 2008 15:58:17 +0000

Big Brown wants to lend you a big hand — if you’re a small business that imports goods from beyond our borders.

The novel twist: UPS will provide financing for the deals, instead of traditional financial institutions.

How the UPS Capital “Cargo Finance” program works:

A small business ($50 million or less in annual revenue) makes a deal with a foreign supplier
UPS pays the supplier and receives the bill of lading, and
The small business pays UPS half of the cost up front, then has 60 days to pay the balance.

Why is this a benefit?

Small businesses usually must rely on bank financing, letters of credit or even pay cash in advance to foreign suppliers.

Traditional finance sources balk at many of these deals, because they’re not capable of successfully monitoring shipments in transit.

That’s where UPS Capital has the edge. The collateral for UPS Capital is the shipment itself. With real-time tracking ability, UPS Capital sidesteps that problem.

Fed resources are out there — if you know where to look

Charlie Walker — Thu, 24 Jul 2008 14:12:54 +0000

Are you getting your slice of Uncle Sam’s pie? The feds were supposed to serve up 23% of its procurement dollars to small businesses during 2007. Official figures won’t come out until next month, but it appears 22.1% of federal contracting money found its way into small business coffers in 2007.

While the 2007 percentage lagged behind 2006, the money pot for 2007 was bigger — $436 billion.

One of the major hitches in getting money into the hands of small business has been a paperwork loophole that the feds say they’ve closed.

Until last year, small businesses that got procurement money and then were acquired by big businesses remained on the procurement rolls, for record-keeping purposes — even though the dough was lining a big company’s pocket.

This year is the first time that businesses have been required to demonstrate the accuracy of their systems for contracting.

The prospects for small business procurement funds are brightening, says the National Small Business Association.

Interested in learning more about federal small business procurement money?

Contact the Small Business Administration (www.sba.gov) or the American Small Business League, (www.asbl.com).