As the media focuses on the financial problems of the Big Three automakers (Ford, General Motors, and Chrysler) and Wall Street banking giants, small businesses seem to be the forgotten link in the financial dilemma. Saying that the recession and continuing financial crisis is hurting small businesses, is an understatement. Small businesses across the nation are in a death struggle to stay afloat as lending institutions continue to hoard cash and customers take longer to pay their bills. Intuit's survey of 751 businesses with fewer than 10 employees found that owners have average overdue customer payments of $1,500 a month. With 22 million businesses falling into this category, the overdue payments add up to a cash flow strain of $33 billion A small-business owner in Texas is a good example of small businesses with big cash flow problems. James "Hoss' Boyd owns an electrical contracting and solar energy installation firm. His products and services are in demand, so sales are great, but that doesn't help his cash flow position. A big part of his day is trying to collect his receivables (money owed his company so that he can pay what he owes to other firms. Boyd knows he isn't alone. "I got a call today from our print shop." he says. "We owe them $400 to $500 for blueprints." It was the company owner on the line making collection calls Mr. Boyd says. adding, "I would venture to say he's waiting on invoices, too." Boyd sought help from lenders for months but could only get a line of credit through his credit card company. Unfortunately, he is behind on his payments that carry a 29.99 percent interest rate. Boyd joins the multitude of small business owners hoping for an economic turnaround and some solution to the short-term lack of credit. Raymond J. Keating, chief economist with the Small Business and Entrepreneurship Council is quick to remind government policymakers that for a recovery to occur, small businesses must be invited to the party. According to Keating, some 60 to 80 percent of new jobs come from small businesses. Fifty percent of private sector gross domestic product GDP is also created by small businesses. Perhaps Hoss Bovd said it best "Were on the mend, but we have a Which one of the following is the most widely used source of short-term funding that Mr. Boyd (and other small business owners) would use to operate their business? Multiple Choice
Factoring accounts receivable
Toking out loon from a bank or other financial institutions
Trade credit
Issuing a promissory note
Borrowing funds from family friends