Notes Payable and Long Term Debt
Part 3 of a 3 part series
Warning Signs:
- Increasing net sales to net working capital.
- Rising net fixed assets to tangible net worth ratios.
- Rising debt to tangible net worth ratios.
- Difficulty borrowing funds.
Steps to Improve:STRETCHING YOUR CASH / MINIMIZING BORROWING
- Use customer provided capital; encourage advances, progress payments.
- Negotiate special terms to stretch cash flow.
- Use supplier capital; negotiate storage, price, shipment breaks, terms.
- Use customer capital; sell from catalogs..
- Use third party credit (credit cards, direct finance); not house credit.
- Tap your life insurance for last resort financing.
- Tap outside investors for capital.