What is Cash Flow?

Cash flow is the movement of money into and out of your business over a period of time. Positive cash flow means more cash is coming in than going out; negative cash flow means the opposite. A business can be profitable on paper and still have cash flow problems if customers pay slowly or expenses come due before revenue arrives. Lenders focus heavily on cash flow because it determines whether a business can make loan payments.

Example

A seasonal retailer has strong cash flow in the fourth quarter but negative cash flow in the early months of the year.

Related funding

Working Capital: Keep payroll, inventory and operations moving.

Related terms

Business Credit ScoreCDC (Certified Development Company)CollateralAll terms