Your business was running pretty smoothly – sales growing, and profits growing, too – and then the credit crunch hit, someone said the “R” word and everything started slowing down almost overnight. Most troubling of all, your customers have been paying you later and later, as if they are using your money to fill their own personal credit crunch. Well, they probably are.

Most of us don’t realize how dependent we are on credit to run our businesses. Vendor open account credit – the kind you extend to your customers – is by far the largest source of borrowing power in our economy. When you sell your products and services on credit, you are making interest-free loans to your customers, even if you are financing those loans with a bank loan for which you pay interest every month. When collections roll in on time, it all seems to work out nicely; but when collection slows down, you still need to replace goods you’ve sold, pay your workers (on time), and pay the rent and all the other expenses of running a business. Assuming your bank credit lines are in place and your margins are adequate, you have a bit higher interest expense and you can ride it out with your customers. However, if your credit lines or cash reserves aren’t sufficient to cushion you from the sudden change in cash flow, your business could be in big trouble. Besides, most bad debt write-offs come from old balances, not current ones. The older the balance, the higher risk it will never be collected.

So, your best bet is to encourage your customers to pay on time. No added interest expense, no hassle with customers, no write-offs, everyone is happy. Well, you are probably thinking, ”That was helpful. How do I do that, exactly?” Here are five ideas that can work well for you.

1. Improved credit-granting practices: On the front end, screen new customers more closely before granting a credit line. Spend a few dollars actually getting a credit report, and a few minutes calling a couple of their credit references to get a sense of the relationship they have with your potential customer. The conversation might go to their payment patterns when the economy slows, which could be different from good times. A comment that “they sometimes struggle to keep current but they always manage to get caught up” could be a red flag these days. Also, be watchful of a prospect who has changed suppliers more than once in the past year, and if you can learn the name of their previous supplier, that’s someone you want to talk to.

2. Committed collection effort, all the time: Make collection follow up a key duty of at least one person in your company. Don’t make the mistake of giving the job to your controller to handle in her spare time, just because Accounting handles the money. She likely doesn’t have any spare time, and besides, accounting personnel are not typically the best in customer communication, especially if the subject is touchy. Assign the job to someone who is a good negotiator, has an amiable but firm phone personality, and who understands this is a key job. Most importantly, do what you say. If you promise something in return for prompt payment, make sure you deliver. If you say you must deny future shipments until an account is brought current, stick to it – every time. Key point: If your collection practices have been lax in the past, a culture change may be needed in the minds of your customers, who may be tempted to ‘wait you out’ to see how long the new rules will stick around. This is called a test.

3. Call ahead of time to make sure they’re ready to pay: Have your collection person call the customer’s Accounts Payable department a few days before the due date for payment, “as a courtesy” to your customer, just to make sure everything is in order, there were no problems with the paperwork, and the check will be going out on time. This little reminder, when positioned with friendliness and desire to help, can make a friend of the person who actually cuts the check. And if your customers are lacking something they need in order to pay you, this would not be a good time to be condescending at their inefficiency. Your effort to quickly provide it without them having to run it down in their company instead, could put you at the head of the line for payment.

4. Discounts for prompt payment: This is an old technique that worked well years ago, but has fallen into neglect in recent years as business practices evolved. The old ‘2/10 net 30’ was, and still is, a fantastic deal if explained to customers clearly. Consider this: a 2 percent discount for paying 20 days earlier than normal amounts to an annual return of 36 percent; not a bad yield for a customer whose savings account is probably earning 2 percent a year. Even if your customers planned to pay in 45 days, getting them to pay in 15 days instead represents an annual return to them of 24 percent. You can juggle the numbers any way that makes sense in your industry, but the key is getting the customer to understand the value they get from paying promptly. And by the way, if you do business with certain organizations, e.g., local governments, many of them are required by their policies to take advantage of such discounts. Key point: You must be strict about charging back discounts taken when payments don’t come in on time, as some customers will try.

5. The “Preferred Customer” plan: Want to think out of the box? Consider a special program for “special” customers – free overnight delivery on rush orders, extra discounts, advance notice of price changes, special sales, etc. Promote this as a customer benefit and make it available only under certain conditions, one of which would be consistent payment in accordance with your terms. Don’t make sheer order volume a condition if your low-volume customers produce higher margins, as is often the case. A small invoice that gets paid on time is a blessing compared to a large one that takes 90 days to come in. Still, make the conditions list beefy enough that it doesn’t look like a poorly disguised collection program. Use it as an opportunity to reward the customers you enjoy doing business with, especially those who pay on time every time. Key point: Avoid the risk of alienating customers who are in the program but then fall behind in one or more criteria. Give them the opportunity to rejoin the program after 2-3 months of again meeting all conditions for participation.

You can appreciate your customers’ dilemma in trying to stretch their cash. But that’s not the same as agreeing to be their banker – interest free! You can extend their payment terms, as many companies do at times like these, but in the end you still need to collect your money by a date you can plan on. And you need to avoid alienating your customers in the process. If you do everything you said you would – quality products, competitive price, prompt delivery, etc. – then it’s reasonable to expect your customers to do everything they agreed to, including prompt payment. Still, these days most suppliers will get paid late by most of their customers. Follow the suggestions above and you can be the exception to the norm, the stand-out in the crowd, and certainly a better positioned company when the economy turns around again, as it always does. Wouldn’t that be great?

There are always circumstances in our life that is beyond our control. For these reasons, we sometimes struggle to maintain the ideal credit rating or referred to the assessment of the ability of the borrower to pay regularly on time. To people with bad credits that are having challenges in managing their finances, the solution is adverse bad credit loan. Such crises oftentimes happen when the credit rating becomes adverse. Consecutive failure to pay the monthly dues or declaration of bankruptcy can lead your credit rating into adverse effect. Hence, it makes your credit record looks bad.

Adverse bad credit loans means the lenders will provide money for many purposes such as home improvements, child support, debt consolidations and more. The lenders will ask for collaterals such as home and other valuable asset in order to secure the loan of people with bad credits history.

Again such option will cost more to the borrower. Generally the interest rates are higher compared to stand loans. Other fees incurred will be higher. It is necessary for the lenders to as collaterals so as to have a fallback if unpleasant situations happen and the borrower is not able to pay the monthly dues.

The adverse bad credit loan is not difficult to process and obtain hence this is a recommended solution for people who are in financial crises. There is high probability of adverse bad credit loan approval from the lenders because the potential high risk is minimized by the collaterals which most of the time in the form of properties such as land.

Bad credit records are not big deal for lenders as long as the borrower has a property which will be used as collateral. With the adverse bad credit loan, it helps people to rectify the bad credit rating on their report by providing them money.

The terms of the payment for adverse bad credit loan will vary on the credit history of the borrower. A worst credit history will mean higher monthly payments. This condition may not favorable to the borrower however considering the bad credit record the borrower has, it not the best option with such current financial situation.

Always note that it is better to pay higher monthly fees than ignoring your debts. With regular habit of paying on time, this will eventually rebuild your credit which will be beneficial to the borrower in the long run.

It is expected that the lenders will charge the borrower at a higher rate interest to cover the potential risk taking into consideration his bad credit history. The collateral from the borrower makes the risk lower from the point of the lender.

Adverse bad credit loan should not be taken for granted by the borrowers. Take this opportunity to rebuild your credit reputation for long term goal. Remember that a high-risk borrower has grave consequences. Chances of obtaining any other form of loans when need arises will be difficult not only with the bank but even other venture capitalists.

The adverse bad credit loan may be your last resort so make the most out of it.

You desperately want a new car perhaps out of need or for any other reasons but your bad credit history holds you back. Well this should not be the case nowadays. There are many bad credit auto financing firms that will help you with your auto needs despite of your challenging credit problems, repossession or bankruptcy.

With the bad credit auto financing, your bad credit record will not block your plan to take an automobile loan as you can qualify for bad credit loan.

Like any other forms of loans, it is also determined by credit rating. It is the result of the banks or lending companies’ assessment of the borrower’s credit history and the ability of the borrower to pay the loan. Hence a bad credit auto financing will help the people with bad credit to rebuild their credit ratings. However purchasing a car that you are unable to pay will affect your credit rating. It is therefore a rational decision to take an auto loan that is within your means to pay the installments.

To qualify with the bad credit auto financing, the borrower must hold a job or a source of income that will enable the borrower to pay the installment fees of the loan and to maintain the costs of the car. A tenure of at least one year in your job will improve your chance of having a bad credit auto financing as it gives guarantee to the lenders of knowing you have a stable job and source of income.

Also it is best to keep your address the same for some time to convince the lenders that you are not likely a high risk potential borrower.

Another way to improve your credit reputation and chances of having an approved bad credit auto financing is your membership for any credit union organizations as it has a positive impact to the lenders or banks. Also a bad credit is oftentimes neglected if the borrower will pay some substantial amount of down payment.

As for the auto loans with bad credit through the banks, you will still have the chance to be approved if you already paid off the loan you taken previously. This somehow clears your bad credit history. Alternative way of passing a bad credit auto financing is finding a co-borrower for your auto loan.

It means that the co-borrower will have the same liabilities as you do with the company that financed your car loan. Increase the chances of approved bad credit auto financing by taking a co-borrower with good credit records.

It will be helpful also if you will have a finance manager, who is aggressive and knows well the internal system of the lending company, for your bad credit auto financing. This finance manager will play an important role in taking the possible ways of approve your bad credit auto financing. The bad credit auto financing is a good approach to rebuild your bad credit history hence should be taken seriously particularly the habit of paying on regular basis without delay.