I am in the middle of a situation, OK my credit at certain suppliers is temporarily curtailed, but I am surviving.
In May I supplied a large amount of material to a contractor with a direct cession with the client Municipality in place, should be easy right?
Not so, the contractor does not have secure storage at the job site so he is keeping all the materials at his own workshop till he needs them, so far so good, the consultant will only issue a payment certificate for material on site, so payment will be a long time coming, but it will come eventually.
In the mean time I have told all my suppliers that they will be paid when I get paid or before if I get some extra liquidity on hand, this happened yesterday and I managed to pay one of the suppliers what I owed him.
Now had I been using an overdraft facility and gone into the same situation after three months the bank would have closed my facility and the money I earned yesterday would have just gone into a bottomless pit and I would have been in the same situation as before except that now I wouldn't have a facility and the bank would be twitching every time I wanted to withdraw funds.
So my advice, make your suppliers carry the amount owed, the new rules mean they have to carry on with your original credit agreement after you pay them back so effectively you get an interest free loan to bide you over the lean time, OK the temporary credit squeeze is sometimes hard to bear but infinitely better than dealing with a bank who have whole departments just to make your life difficult.
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