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Recent data shows that SBA lending in Southern California is up about 50% over the same period last year and dollar volume of these loans has nearly doubled. This appears to be good news for small business and supports the notion that the economic stimulus enacted in 2009 reached the right hands.

However this good news does not paint a complete picture.

The oil spill in the Gulf of Mexico has created huge demand for a wide array of resources needed to help in the cleanup process. There is probably no better example than MOP Environmental solutions Inc. They have a patented material used to clean up oil spills. Obviously MOP was going to see a large increase in demand for their product. However huge spikes in demand can create cash flow issues, especially when offering 30 day payment terms.

This is where Bibby Financial Services enters. They provided a $750,000 factoring faculty so that MOP would have the financial capability to complete orders and keep the clean up efforts going at full pace.

This is a prime example of how factoring can help a business’s cash flows.

Sam’s club has begun wearing a new hat; Business lender. They offer business loans through the SBA’s community express program. To be precise, they are not actually making the loans, they have partnered with Superior Financial Group, a leading SBA lender.  This seems like a strange fit for Sam’s club, a large retailer, to be playing financier. But it highlights an important shift in how businesses are demanding money; they want it quick and easy.

So you finally got your start-up off the ground. Congratulations. Business has been good and now you see an opportunity to expand. Congratulations again. However, expanding generally means financing, and financing means credit. Having good business credit can be the difference from capitalizing on this opportunity to expand or watching on the sidelines as it passes you by. This is why establishing the ground work for financing is so important.

The first (obvious) step is to

Net 30 days terms are great for retailers, especially if they can move inventory quickly. How does selling something and counting your profit BEFORE you pay for it sound? For businesses with this blessing, it means low capital requirements. However this good financial situation is at the expense of their suppliers who end up carrying higher capital requirements because of these payment terms.

For larger more established businesses, these capital requirements are not much of a financial burden. They usually have enough cash on hand to manage the float time, and have avenues for financing if things get tight. On the other hand, upstarts tend to be scarce on capital thus making 30 day payment terms much more of a burden. The fact that upstarts usually cannot qualify for any traditional forms of financing exacerbates this problem. However savvy entrepreneurs have a tool to help manage this problem.