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Moody’s helps US SMEs with cash flow forecasting

Moody’s Corporation is partnering with the Foundation for Small Business Development (FFSBD) to connect US small businesses with cash flow forecasting solutions and other financial resources.

In a press release the credit ratings agency (CRA) and research group announced that it will collaborate to provide cash management tools and financial education for the small business assistance network of Small Business Development Centers (SBDCs).

Based in Burke, Virgina the FFSBD is described as the philanthropic arm of America’s SBDCs and provides “critical learning opportunities and information to entrepreneurs, small business policy makers, and small business development centres while bringing attention to the trending needs of the [US] small business community.”

A widespread problem

Citing recent research from Wakefield Research, which found 61% of US small businesses regularly struggle with cash flow, Moody’s said that connecting small businesses with education and cash flow forecasting technology through the SBDC Network will provide boosted support for the nation’s community of small to medium-sized businesses (SMBs).

The press release also pointed to March 2017 study by US Bank that found 82% of business failures can be attributed to poor cash flow management skills, or a poor understanding of how to manage cash flow.

The collaboration comes in the form of a three-year grant, also in partnership with creators Finagraph. SBDC advisors can access the resources online and in-person at SBDC events, providing those advisors with certification to offer their own small business clients cash flow management expertise.

Small business clients of the SBDC can be connected to a six-month subscription of CashFlowTool to manage and forecast cash flows.

“Effective cash flow management is essential for every small business in the US,” said Moody’s Analytics executive director Stephen Tulenko. “Our work with the SBDC is an important part of Moody’s ‘Reshape Tomorrow’ initiative — our global financial inclusion programme, which empowers entrepreneurs and untapped communities with the knowledge and resources they need to create a better future.”

In January, Moody’s announced a partnership with CapX Partners, an equipment financing company that is integrating Moody’s Analytics technology to enhance its underwriting and risk management processes in an effort to broaden access to equipment financing for US small businesses.

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