Proactive lenders ask borrowers about cash flow practices

Description

Abstract: Cash flow is the lifeblood of a small business. This article suggests some questions to ask when evaluating a prospective borrower’s cash flow management, such as whether customers are paying on time and whether the borrower is taking advantage of its credit terms. The article notes that cash flow statements can help lenders understand the overall health of their borrowers’ businesses — particularly whether the borrowers are able to generate and hold cash.