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How Customer Concentration Changes a Financing Conversation
Winning a major account can change a company's growth prospects. It can also make cash flow more dependent on one customer's payment decisions. When seeking financing, management should explain both sides of that relationship. Trade credit insurer Allianz Trade identifies concentration in a small number of customers as a source of receivables and cash flow risk. Customer concentration can also be part of an ABL lender's review. There is no universal acceptable percentage. Mea
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