Consider other financing during loan drought - Washington Business Journal:

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One very old but underused optionis factoring, or accountsd receivable financing, where a third party buys a company’xs outstanding invoices or receivables. “Accounts receivable financing isn’t a said Chad Todd, regional vice presideny with A/R Funding. “Whenever a company creates an A/R Funding purchases that invoice and advancea the money to thecompany immediately, which help their cash flow.” Businesses can then use that cash to cover cash flow shortages or to finance growth.
“It doesn’t have to be a big as long as your company is dointg business with creditworthycustomers [according to] , and we have a few othed groups we use to look at that and we establisuh credit limits,” Todd said. “We actually have a 90-dat agreement that you can terminate atany time, withoutg fees. We only have one fee, which is the fee on our it’s less than 2 percenr for the face amount ofthe invoice.
” After tryingh traditional banks and credit unions, Adam Hoyles, vice president of operationsx for , said it turned to A/R “For whatever reason,” traditional lenders “weren’t interestes in doing a business line of credit,” Hoylees said. “We were growing and our operations were increasinhg in both speedand intensity, and it was more and more difficulgt to keep running. “Clients would go 30 to 60 days topay us, but when you send someonew in the field, you still have the same The business still has to run while you are waitin to get paid. When I look at my abilitu to predict cash flow on a regular the fee is absolutelywortnh it.
” Another funding source that’s wort looking into is the ’s America’s Recoverh Capital loans. Beginning June 15, the SBA will start guaranteeing the up to a maximumof $35,000. “It’s an unusual The SBA is paying the saidRalph Ross, deputh director of SBA’s North Floridza district office. “We have never done it quit thisway before. The bank will disburse the loanand we’ll stargt making monthly interest payments on the loan straight to the Plus, we guarantee 100 percent of the principal for the bank.
” The SBA is stillk drawing up guidelines for the loan, but Ross said it estimate s the program could provide for as many as 10,00o loans. The loan program is designed to help businesses that are strugglingb due to theanemixc economy. “The idea is it’sz just something that a company can use to help pay its Ross said. “There is stillo going to be a credit test; we want to make sure they areviablr companies.” Chris Rodatz, vice president/SBA lender at , has alreadh had a number of clients call to learn more abougt the program. “They say, ‘We coulde sure use it.
I need to buy inventory,’ or, ‘I’m falling behind on my obligations,’ ” Rodatz said. For any businesw 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 goint to participate in the Rodatz said. “Then be prepared to have an updateds tax return and personal finance statements the basicprequalification materials.” Another new SBA funding option in the worksz specifically targets vehicle dealers and will allow lendera to provide lines of credit through the 7(a) programk for titled inventory.
“Dealer floor-planning is something we traditionalluy haven’t been involved in,” Ross “We raised the size to allow dealers thatnormally don’t qualifgy for 7(a) lending. “And the new programm will help us finance the inventoryg on theshowroom floor. Any properth that has a title can qualify. That’es a very interesting, new product. Obviously, there’s a lot of distressz in the auto industry andrelated industries, such as RVs and and we are hoping to help out with