Businesses face cash flow pressure

A warning has been issued that there will be a rise in the number of businesses going bust because of mounting cash flow pressure.

The latest trade payment figures from Dun and Bradstreet show small businesses in particular are under significant pressure.

Cash flow pressures are mounting for businesses as people hold on to their money, delaying payment.

Spokesman John Scott says what's happening is that people are holding onto their cash and delaying payments up to 50 days past due date in an attempt to manage their cash flow, because they themselves aren't being paid.

He says people are now hoarding and businesses are feeling the pinch and as a result the number of businesses that will shut up shop or go into liquidation will increase.

Scott says the effect of the credit crunch on businesses' ability to access funds can only be adding pressure to organisations trying to manage their cash flow.
Source: Newstalk ZB

http://tvnz.co.nz/view/page/536641/1964602

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Businesses face cash flow pressure