Working Capital with IRS Liens without SBA Loans

IRS tax lien ar financingIn 1817, Benjamin Franklin famously wrote. “In this world, nothing can be said to be certain, except death and taxes.”

Your epic battle has ended in defeat. Despite your efforts to avoid it, the IRS has won the day, and now there is a tax lien attached to your credit report.

How will this affect your ability to succeed going forward? Where can you turn for additional small business working capital? Banks would seem to be off-limits as they notoriously look at credit scores to make their loan decisions. Your best option would appear to be alternative forms of financing.

Alternative Forms of Financing

One option would be turning to government programs for help, with the Small Business Administration (SBA) being the most obvious source of assistance.

The SBA does not make direct loans to the public. Instead, they partner with banks, guaranteeing a percentage of the loan or line of credit to offset the higher risk of lending to small businesses.

This improves the likelihood of creditworthy companies to be approved, but banks generally do not lend to businesses saddled with IRS tax liens. They must accept the loan by their lending criteria before they will agree to participate in an SBA guaranteed loan.

Most banks look at both the financial situation of the company and its owners to make a loan decision. Thus, personal tax complications will most likely prevent small businesses from using SBA financing.

Are there other avenues for future working capital needs? Alternative funding sources are available outside of the traditional arena. Funding can provide small business owners the opportunity to continue on their path to success despite IRS problems. One can obtain working capital funding through the company’s actual operations. Examples of this are purchase order funding, invoice factoring, and accounts receivable factoring.

All of these funding sources are based more on your customers’ financial strength rather than personal or business creditworthiness. Paragon works with the IRS and creates subordination agreements. We can successfully fund small businesses, enabling us to meet your funding needs, tax problems notwithstanding.

Factoring At Paragon Financial

Paragon Financial can advance up to 90% of purchase orders or invoices to enable your business to fulfill large orders. We can asses the funds as a single transaction or a line of credit to fund multiple orders.

Funding is based on the strength of your customers. This can help to offset the obstacles created by your small business status. Accounts Receivable factoring is also available to eliminate the wait for collections at the end of the transaction. Paragon also offers credit protection to avoid future collection losses.

At Paragon Financial, we have been funding for over 25 years. We understand your specific industry needs. Give us a call at 888-271-9347 today, fill out the form to the right, or chat with us.

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Working Capital with IRS Liens without SBA Loans

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