[Yankeeman07]

Sure it does as I'm sure you and everyone here sees it on a regular basis.

Business is not functioning optimally, over time client fills in gaps with borrowing, eventually they hit a cash flow crunch and it becomes a time issue because they need to pay rent or make payroll or any other number of things and they go looking for more funds.

The long term answer is to address whatever issues they have that put them there in the first place. The short term problem still exists today.

I used to say that I wouldn't do that type of financing at all and did my best to try slow down and take a more affordable route, or see what the underlying issue was. What that resulted in was clients disappearing for a couple of months, resurfacing with their docs, and saying by the way I had to take out this loan/advance in the meantime. The result was the same except I gave away business.

At least if I work with clients on these types of deals I can explain the funding to the client so they understand everything and can make their own decision, as opposed to the next guy or funder rep who glosses over the negative and accentuates the positive to get it closed. We can ask questions like does this solve a problem or make it bigger? If you do this, what's your exit strategy?

Believe me, I would happily choose to get paid less and have a better deal to present to a client. Unfortunately here I made that effort without success.

What steps can the business owner take to increase cash flow - Increase sales, cut expenses, eliminate excess inventory ?

This may not be items you want to get involved with , but, many times the owner has to look inward - they cannot borrow
themselves out of trouble - how did they arrive at this spot today?