Health care reform confusing for majority of small business owners

With the Affordable Care Act expected to be fully implemented by early 2014, small business owners have just under a year to comply with the changes. 

However, many are still confused about some of the mandates, which could lead to costly mistakes that may hurt a business' cash flow. 

If health care reform slows a small retailer's cash flow, they could struggle to obtain a loan from a bank to help keep their stores running. Those who are denied, might have other options, as inventory financing could be a good choice for small businesses that have product in stock. 

Through this type of asset-based lending, retailers are able to obtain a revolving line of credit using their inventory as collateral. This can allow them to have available funds to restock their shelves and take advantage of opportunities for growth during situations where cash flow might not be up to par.

According to a new survey of small business owners by eHealth, 62 percent of respondents said they don't understand health insurance exchanges at all, while 20 percent said they have a vague understanding. Additionally, 71 percent of small business owners said they would prefer to purchase their health insurance from a source of their choice. 

With so many misunderstandings about the ACA, small business owners could be faced with higher costs. The survey found the majority of respondents believe costs will rise, with 21 percent unsure of what will happen to their health care expenses. 

In tough economic times, many small businesses are unable to deal with increased costs, so health care reform could have a major impact. 

Retailers that do lack the ability to obtain a loan, can potentially take advantage of inventory financing to get them through these difficult times.