When Cash Flow Gets Tight: How Owners Can Act Before Crisis Hits

For many lower-middle-market companies, especially family- and founder-owned businesses, the signs of financial stress do not always look like a crisis. They start small—tightening cash flow, slower collections, customer losses, rising pressure from lenders and vendors/suppliers, or even key executives leaving or quietly exploring new roles.

But in today’s environment, those early warning signs are more than just growing pains. These signals show that immediate action may already be needed.

As interest rates remain elevated and inflation lingers, business owners are navigating a more selective and risk-averse lending landscape. After several years of stimulus-fueled growth, many are now facing credit fatigue—and finding that traditional sources of capital are harder to access just when flexibility matters most. In this kind of environment, the margin for error shrinks—and the ability to recognize early signs of pressure becomes even more important.