It is no secret that one of the biggest challenge for a small business is the availability of working capital or cash on hand. "A report by the Small Business Administration found that insufficient or delayed financing is the second most-common reason for businesses to fail" Because of this, American Express and Quickbooks have partnered to offer small businesses a solution for quick financing and payment options.
E-Bai Koo, executive vice president, global product management, American Express Global Commercial Payments explains the creation of the new product stating “We’ve heard time and again from small business customers that cash flow is a key area of concern when it comes to managing day-to-day business expenses. By embedding our Working Capital Terms’ digital loans directly into QuickBooks, we make financing available to our customers when and where they need it most to pay vendors, simplifying the payments process and reducing time spent reconciling accounts.” To qualify you must be a QuickBooks Online small business customers who are also American Express OPEN Business Card Members.
Small enterprises currently operate with cash reserves averaging less then 30 days. Payment terms lasting 60 days or more combined with rising costs of products and employee salary can result in a heavy financial burden on small businesses. Not all businesses need the 6 month 250K investment, but rather a quick financing option to hold over until they receive payment. This product is an excellent idea that could go very far.