Paragon Financial Group is funding during the COVID-19 crisis.

Financing Your Business During A Recession

Financing Your Business During A RecessionDuring a recession, it can be challenging to finance a business, much more robust than it would result in an otherwise healthy economy. Banks are very slow and hesitant to give out loans because the likelihood that they will be paid back significantly decreases. Bank loans are difficult for new companies to receive, even in a strong economy. It generally takes solid financials, lots of assets. Also, it requires that the company has been in business for a reasonable amount of time before a bank feels comfortable lending them money.

The problem is that a large percentage of companies do not meet these criteria. Many businesses are left out in the cold with the burden of finding a way to finance their endeavors and growth. In this article, we will take a look at why you should consider using invoice factoring to fund your business during a recession.

The Many Benefits to Invoice Factoring

It allows companies to get the money that they need very quickly. The process is straightforward, much simpler than dealing with a bank or venture capitalist, and there are fewer worries. Factoring is also not a loan, so there will be no monthly payments.

Fast Money

Most factoring companies will be ready to hand over the required amount of cash in less than one week. This means no waiting for months on end hoping like crazy that you are going to get a loan. If a bank were to deny the loan, this would mean additional time and worry. The burden would then be to try to come up with a workable backup plan. Being able to secure the money that a company needs right away allows them to make purchases without a lot of delays.

Easy Financing

Invoice financing is much easier than a bank loan. A company does not need excellent credit. The invoice holder’s credit will be much more scrutinized than the actual company. Businesses also do not have to be in business long. For the most part, they only need to have outstanding invoices and customers with good credit.

Fewer Worries

When a company knows that invoice financing is available, they have fewer worries about how they are going to pay their bills, employees, operational costs, and other expenses. They can rest easy with the knowledge that they will be able to secure the money that they need.

No Loans

One of the best things about factoring is that a company does not have to take out a loan. Debt is often a necessary cost of doing business, but it is still risky. If a company is not able to pay back what they owe, they are in danger of losing valuable and vital assets or worse, going out of business. By selling their accounts receivables at a discount, they can get money right away without having to wait to collect it themselves. In exchange, the factor can make money on the invoices by charging the company a discount fee for their services.

  • Get Cash Today

    Best Factoring CompanyGet the Cash You Need Today

    Just fill out this quick & easy form!

  • This field is for validation purposes and should be left unchanged.
Get Cash Today
  • Quick Contact Form
  • This field is for validation purposes and should be left unchanged.

Back to Top

Best Factoring Company

Get Started Immediately