Small business is struggling with middle-class Americans not spending as the economy limps along. Yet the vast majority of purchasing power resides outside the US. American small businesses could increase their growth by tapping into this outside consumer base if they only had better access to financing.
This past week Paragon Financial provided a $500,000 accounts receivable financing facility to a construction company working with county and city government contracts. We also provided a $250,000 accounts receivable financing facility to a company that repairs and maintains industrial machinery.
Jon Anselma of Paragon Financial Group talks about factoring companies role in business financing on PBS’ Nightly Business Report
Client: A Raleigh, North Carolina area veteran-owned staffing agency providing unarmed security personnel.
Industry: Security Guard Staffing
Situation: The Company had won a $2 million one year self-renewing contract from the U.S. government to provide security personnel for the Mine Health and Safety Academy. These personnel would require high end security clearance, which meant higher pay, putting pressure on the Company’s cash flow. Their bank line of credit provided enough funding for their other endeavors but this project required all new financing, which the bank was not willing to provide. Without financing, the Company would have to pass on the contract and the chance for growth.
Solution: Paragon provided Accounts Receivable Financing with a factoring line of $600,000.
Result: The Company received the necessary funding to take on the contract and expand. And, they now have the factoring foundation in place for any other contract they pursue in the future.
Your business has closed the first round of funding. But what happens in the months it can take to get the cash? (btw, with factoring, the wait is days, not months)
Small business learned a lot in 2011. It was certainly a challenging year for many.
Bank loans to small business fell to the lowest level in more than 10 years. Whether your business is struggling or successful in this economy, it will still be hard to find bank financing.
You hear about how big banks are loaning more to small businesses. The reality can be very different. Read about why big banks aren’t lending to small businesses.
Financial crises and ensuing credit crunches make it harder than ever for small businesses to borrow money. Purchase order financing can be your solution.
European banks are using vendor financing to attract buyers for distressed loans and other assets.