Friday, September 21, 2012

SMBs and the Impact of Bankruptcy Law Changes

According to an article in the New York Times, Adviser to Businesses Laments Changes to Bankruptcy Law, “changes in bankruptcy law have given unsecured creditors more power and made bankruptcy more expensive." Previously bankruptcies could take years and years to finalize but now the maximum time rarely exceeds three years.

I have worked with companies that have been under financial duress. The key is communication. If you are in a cash crunch and are not sure when it will end yet you still have paying (albeit slow paying) customers and sufficient revenues, notify your suppliers and vendors as soon as you become aware of slowing receipts and the associated hitch in cash flow. The earlier you communicate, the better for your relationship with your significant vendors because the additional time gives them time to plan and potentially come up with options to assist you...and them.
To continue reading this article, go to Bankruptcy Law Changes' Impact on SMBs.

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