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Finding a Lender After the Storm Has Passed

Factoring companies like Eagle Business Credit are not scared by recessions. In fact, they typically see more activity during downturns due to banks becoming more risk adverse. What was previously unknown was how the alternative lenders such as the MCA’s and online lenders would react as they haven’t been around long enough to weather any prior storms. Turns out, most of them closed their doors, put their shutters up and ran for the hills before it made landfall, so they are also out of the picture as an option for most small businesses now too.

Finding a Lender During COVID-19

The current situation does give some different options to small business owners, through some Stimulus Loan Programs such as the Payroll Protection Program and the SBA’s Economic Injury Disaster Loan Program (EIDLP). These are a great help to some companies, and if you qualify for a loan that will either be potentially forgiven or at the very worst command a 1% interest rate, you should absolutely apply for one. But what happens if you don’t qualify, can’t find a bank that will even talk to you, it won’t be enough or worse still, the money runs out before you are approved?

Long Term Business Financing

It’s important to remember that businesses need more than a quick shot in the arm to survive in the long run. An immediate injection of cash will help for a couple of months, but then what? After all this is over, a business is going to need a reliable funding source that provides ongoing working capital and a bank line of credit probably won’t be available. This is where invoice factoring really comes into its own. A factoring company doesn’t rely on a business owner’s personal credit or assets, or the profitability of their company. It looks at what they do and who they sell to. It provides on going funding against new invoices issued, so it has the ability to grow with a business as the more sales it can make, more money can be advanced. Compare this to a traditional loan where once the money has been spent, there is no more available. There are no loan payments to make either, as the factoring company gets repaid by the customers when the invoices get paid rather than from the business itself.

Here’s how it works:

invoice factoring timeline

If you know a business that sells to other businesses that needs money either right now or in the future, please reach out to us to see how we can help. We can make a no commitment recommendation on the best funding solution for them. Many of our programs don’t have contracts to tie you in and our plans start at rates as low as 1%.