Microbusinesses Not Interesting To Senate Panel?

Jun 6th, 2011 | By Dawn Rivers | Category: Current

I took another look at my podcast graphic. Definitely time for an update!

Here’s a real basic concept for you: businesses need customers. When businesses have customers, then they have cash flow. Cash flow enables businesses to do several things:

1. They can self-finance a lot of what they need with internal capital.

2. They can afford to borrow money, if necessary, because they have sufficient cash flow to handle servicing a loan.

3. They can justify the loan because they have the demand (i.e., the customers) to warrant expansion.

4. They can possibly actually get the loan because they have cash flow (of course, they still need good credit and collateral).

It all starts with customers. This is Business Management 101. Cash flow is king.

Which is why it’s funny to listen to lawmakers talk about access to capital as if borrowing money will return small businesses, and therefore the U.S. economy, to prosperity.

Haven’t we heard that tune before? You’d think Americans would never again want to listen to anybody suggesting that debt is what they really need.

But, here we are, with coverage of two separate hearings on small business access to capital, one in the House and one in the Senate. And, just to round out the picture, we have another of our periodic peeks at the economy, which ain’t pretty.

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