How Can A Credit Crunch Hurt A Business

Definition of credit crunch from www.dictionary.com

noun

a state in which there is a short supply of cash to lend to businesses and consumers and interest rates are high 

Unless you're an exceptionally liquid company, you'll need credit to finance the company's operations. Here are some ways a cash shortage will hurt.

1. You have Post-dated checks that are maturing in three days but you need cash right now for payroll. You cannot skip payroll!

2. You have an order for your product, but you don't have the cash to import it. Lost business!

3. You plan to expand but you don't have a lump sum to build the store. Lost opportunity! The company could have used a loan and paid it in installments while taking advantage of the opportunity to expand.

Use credit wisely and money will surely attract more money!

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