In hard economic times credit dries up for small businesses, and that is a shame considering that interest rates are at an all time low at under 1% FED Rate.
So, where can you get capital for your business at a time when Venture Capitalists are funding very few deals, investment banks are DOA, and the local bank smiles at you, but is hardly interested in giving you a loan? Well, there is always family and friends, but what if you need more money than they can muster? Some business text books suggest leaning on your vendors to help you with financing, better terms on inventory, marketing assistance, etc.
Does that make sense for you? Sure, but also realize that your vendors are also in the middle of that same recession.
Additionally, it's hard for vendors to get excited about what you are doing without knowing you will succeed and they will become the Simplot Potato Guy for McDonalds some day.
No one cares what you think or your plans; that are based exclusively on what you are going to do in the future, but still, you must have your vendors on your side to help you with the float.
Just be careful when they ask you to put up or shut up that you do not blow your much needed cash flow without verifiable proof they will be there for you.
Indeed, once you show them the money, they chock up the sale and move to the next and all those promises become less important in their minds almost to the point they think you are an aggravation rather than their best future customer.
Think on this.