Taking a loan doesn’t mean that a business is not doing well. A growing company can always take a loan to buy more equipment, inventories, to set up a new office or to bid for a new project. If your customers are small businesses, they too will understand the importance of liquidity in cash flow.
64% of SMEs currently face some form of delay in receiving payments from customers. In fact, delayed payment was ranked as the top finance-related challenge in a recent survey. If your business involves large MNCs or government projects especially, they should understand their long credit terms will affect their vendors’ cash flow as well.
Furthermore, their finance and purchaser are often not the same people anyway. Just like most of us have a car or housing loan, taking a loan doesn’t necessarily suggest how your company is doing, but how you might be expanding. Knowing that you have a financier supporting your business can also give them the confidence that you have access to funds to get the necessary equipment or to fund your payroll, ensuring the project’s success.