Consider other financing during loan drought - bizjournals:

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One very old but underused optiojnis factoring, or accounts receivable financing, whers a third party buys a company’s outstandinv invoices or receivables. “Accountes receivable financing isn’t a loan,” said Chad regional vice presidentwith A/R Funding. “Whenever a company creates an A/R Funding purchases that invoice and advances the money to thecompany immediately, which helps theif cash flow.
” Businesses can then use that cash to covere cash flow shortages or to finance “It doesn’t have to be a big company, as long as your compan is doing business with creditworthy customer [according to] , and we have a few other group s we use to look at that and we establish creditt limits,” Todd said. “We actually have a 90-day agreement that you can terminate at any without fees. We only have one fee, whichg is the fee on our money; it’z less than 2 percent for the face amoung ofthe invoice.
” After trying traditional banks and crediyt unions, Adam Hoyles, vice president of operationx for , said it turned to A/R “For whatever reason,” traditionapl lenders “weren’t interested in doing a business line of Hoyles said. “We were growingb and our operations were increasing in both speesdand intensity, and it was more and more difficult to keep running. “Clients would go 30 to 60 days topay us, but when you send someone in the field, you still have the same payroll.
The businesds still has to run whilr you are waiting to get When I look at my ability to predictg cash flow on a regular the fee is absolutely worth Another fundingsource that’s wortg looking into is the ’s America’s Recovery Capital loans. Beginning June 15, the SBA will startt guaranteeingthe loans, up to a maximum of “It’s an unusual The SBA is paying the interest,” said Ralph deputy director of SBA’s Nortu Florida district office. “We have never done it quite thisway before.
The bank will disburse the loanand we’ll start making monthly interest payments on the loan straight to the Plus, we guarantee 100 percent of the principal for the The SBA is still drawinb up guidelines for the loan, but Ross said it estimate the program could provide for as many as 10,000 The loan program is designed to help businesses that are strugglinyg due to the anemic economy. “Thwe idea is it’s just somethinhg that a company can use to help pay its Ross said. “There is still going to be a creditg test; we want to make sure they areviablre companies.
” Chris Rodatz, vice president/SBA lendef at , has already had a numbef of clients call to learn more abou the program. “They say, ‘We couls sure use it. I need to buy inventory,’ or, ‘I’j falling behind on my obligations,’ Rodatz said. For any business that’s investigating the ARC loan program, now is the time to “First, they need to contact their bank to make sure the bank is goinvg to participate in the Rodatz said. “Then be prepared to have an updateds tax return and personal financestatements — the basic prequalification materials.
” Another new SBA fundingg option in the works specificallh targets vehicle dealers and will allow lenders to provide lines of credit through the 7(a) program for titled inventory. “Dealeer floor-planning is something we traditionallyu haven’t been involved in,” Ross “We raised the size to allow dealers thatnormally don’t qualify for 7(a) “And the new program will help us finance the inventory on the showroom floor. Any property that has a title can That’s a very interesting, new product.
Obviously, there’ s a lot of distress in the auto industr y andrelated industries, such as RVs and and we are hoping to help out with