What are some takeaways from Sears’ Chapter 11 filing for a small business owner?

On Monday, October 15th, Sears filed for Chapter 11 bankruptcy protection. Although the retail giant has been hemorrhaging for years, this will impact many businesses and over 100,000 creditors which Sears owes over $10 billion. Unsecured creditors will most likely receive pennies on the dollar or nothing at all. About 200 suppliers have stopped shipments within the past two weeks in efforts to minimize loss on receivables.

If you own a small business, chances are you don’t have the comfort of a billion-dollar annual revenue to absorb a bad debt. If a customer cannot pay or continuously has delinquent payments, your growth may stunt, or your business may run out of accessible working capital funding to pay your own vendors. That could put you out of business. Learn to recognize the warning signs that your customer is struggling. Work with customers that can follow through on payments to your business. Eagle Business recommends clients with good credit, while still allowing your business full autonomy over choosing your customers. Your business can function smarter with Eagle tools and personnel ready to advise you.

How would your small business weather the loss of payment from a large customer? How can you better minimize your risk of non-payment by your customers? In addition to financing receivables, Eagle Business Credit offers free credit risk management. Our credit checks better ensure you will be paid for the goods and services you provide to your customers. In addition to credit checks, we handle the collections of receivables directly. It’s a win-win. You no longer have to wait to get paid, and we follow up with your client for collection of the invoice. You have done your part in cultivating a strong relationship with your client. Let us handle the collections, so you can continue selling and growing your business.

An overwhelming number of failed businesses, 82%, cited insufficient cash flow as the cause of their failure. Be proactive about your business’s financing plan. Invoice factoring not only adds a level of protection for small businesses by providing credit screening but also brings immediate cash flow to encourage business growth and sales.

CEO of Eagle Business Credit, Ian Varley, discusses Sears, Chapter 11, and Factoring in a vlog here: https://youtu.be/7vp6fTI6_ts

Sources:

Chicago Tribune, Fortune, AP News, CNN Business


Leave a Reply