A recent national survey from Dun & Bradstreet and Pepperdine Graziadio School of Business and Management confirms what we have always known, small and medium- size businesses struggle with access to working capital.

A recent national survey from Dun & Bradstreet and Pepperdine Graziadio School of Business and Management confirms what we have always known, small and medium-size businesses struggle with access to working capital. 

According to the second quarter 2017 Private Capital Access (PCA) Index report, six out of ten U.S. businesses struggle with working capital challenges and it’s their reason for seeking financing, representing a 5- year high. A key reason for this struggle is that twenty-two percent (22%) of small (<$5 Million in revenue) and medium-sized ($5 Million – $100 Million in revenue) businesses reported that their accounts receivables payments have slowed over the past three months. Is any of this similar to what you encounter every day? 

The good news for all businesses struggling with access to working capital is that there are options available even when a bank turns you down. The options, often provided by an alternative lender such as Federal National Commercial Credit, include Account Receivable Factoring, Asset Based Lines of Credit, Unbilled Accounts Receivable Financing, Inventory Financing and Machinery and Equipment Term Loans. For those who are not familiar with these various financing options, I would like to arm you with information on how exactly each can help you increase your much-needed access to working capital.

Accounts Receivable Factoring directly addresses the issue of slow accounts receivables payments being received. With this type of financing, you can gain access to your accounts receivable assets immediately. You simply submit your invoice to your client then submit a copy to the finance company. You will then immediately receive up to 90% of the invoice amount, and the factoring company will wait to receive payment from your customer and then submit the balance minus their fee to you.

An Asset Based Line of Credit allows you to borrow against your accounts receivable and inventory assets. The value of your assets is used to give you easy access to working capital for you to purchase materials, make payroll and cover other operating expenses. 

Earned but Unbilled Accounts Receivable is much like Accounts Receivable Factoring. The big difference is it allows you to access the working capital from your invoices even before you have billed your clients as long as the work has been completed and the terms of the contract stipulate that billing can only occur in limited increments.

For companies who could benefit from expanding or re-structuring their current term loans, a Machinery and Equipment Term Loan can be the solution. It provides a way to lower your monthly payments and free up working capital by utilizing certain fixed asset of your company.

If your business is like one of the 66% of small to medium-sized businesses that participated in this study Federal National Commercial Credit can help. Give us a call today at (800) 523-0881 and put one of our financing solutions to work for you giving you access to the much-needed working capital.