A bank manager told me my float was the problem, not the rates

Sat down with a loan officer at Comerica last Tuesday to refinance the shop's building, and he pointed out I was sitting on 14 invoices over 60 days old. He asked why I was sending good money after bad when I could just factor them or push net-30 terms, and it made me rethink how I price jobs entirely. Anyone else here run credit checks on new commercial clients, or do you eat the risk and hope they pay?

2 comments

2 Comments

luna_wright2d ago

Hold up, 14 invoices over 60 days old? That's basically a whole month of work just floating out there. I would've lost sleep over the first one, let alone fourteen. It's wild that you didn't catch that sooner, but honestly, banks love pointing out stuff you already kinda know but don't want to face. On the credit check thing, I run them on anyone new who looks even slightly shaky, but I've been burned by a big name that paid late every single time. Maybe push net-30 harder and let the slow payers weed themselves out, because hoping for cash that never shows is just a slow leak.

emma_flores1d ago

Another angle here that nobody's mentioned yet: those late invoices might be messing with your borrowing power more than the bank is letting on. Lenders don't just look at your credit score, they look at your accounts receivable aging report. Fourteen invoices over 60 days makes your business look shaky on paper, even if the clients are solid. That means when you actually need a line of credit or a loan for something real, like new equipment, they might say no or jack up your rate. Getting those paid isn't just about cash flow, it's about keeping your financial reputation clean for the future. Have you asked the late payers if they have a specific reason or maybe a shorter payment cycle that works for them?