Contract Renegotiation, Bank Loans, Funding and Cost Savings

Many businesses are taking advantage of difficult times to look at their current contracts and agreements to see if they can get a better deal. Small Business Research Board publishes the Small Business Index to track small business issues in the US and Canada. It also tracks national and regional small business trends.

The research board has released a survey with over 1000 small businesses responding that indicates that 18 percent renegotiated pricing agreements. Based on this information, small businesses may consider looking for better deals even with loans. Some businesses even lower their leasing terms by reducing monthly payments, lowering the number of years in the release terms or cutting the leasing space.

One company negotiated with its client and the client took on four of its employees. This not only led to payroll savings, but also a big contract with the same client.

Pay your bills on time or early, and you might be able to get better deals and lower rates. Small businesses that don't pay on time might still make a deal because the vendor prefers to get some money than no money.

But if you struggle to find a loan with a bank and have nothing to renegotiate in the first place -- especially with their tightening lending terms as the Federal Reserve reports that two-thirds are doing so -- look to private lending and financial services. Wall Street Journal also reports that many banks are not writing as many small business loans compared to other types of loans.

The same article from WSJ also says, "...many small business owners don't even bother applying for new loans, since they assume there's almost no chance of being approved by loss-scared lenders." While that may be true for some lenders, not all lenders are afraid to look at small businesses and consider helping them.

What about venture capital investments? Those dropped by 30 percent in the fourth quarter according to research from VentureSource.

What creative ways can you come up with to renegotiate for your business? You can cut down, but not completely. One company was going to stop outsourcing and move in-house. Instead, the outsourcing company came up with a small solution. This helps both companies retain their relationship without terminating anything.