What questions should a business ask its bank to make sure its plan is financially strong?
They should ask, ‘How do I work it out so that I have at least six months reserve either in credit line or cash or continuation insurance to provide for working capital for the company if there were a catastrophe?’ The reason for the reserve is to take advantage of steep discounts on merchandise that a business can buy when another company goes out of business or is seeking cash and they let go of inventory for very low prices. A business could save up to 75 percent on the purchase price of inventory if they have the cash to act quickly.