Banks reported tightening their lending requirements on all types of business loans in the second quarter as quarantine related shutdowns plunged the economy into recession. Demand for all types of business loans fell, according to the Federal Reserve. Banks reported that their lending standards are now at the “tighter end of the range” of standards since 2005.
Banks cited “less favorable or more uncertain economic outlook, worsening of industry-specific problems, and reduced tolerance for risk.” Banks also are worried about future write-offs.
This latest survey is more bad news for business owners since obtaining a new bank line of credit just became that much harder. For business owners that need additional capital to survive and grow there is a fast and simple alternative to bank lending – factoring. Factoring companies buy your invoices and wait for your customer to pay them. This speeds up your cash flow so you can stay current on your operating expenses and grow your business. Factoring companies base their credit decisions on the strength of your customer – not you. Factors will also minimize your risk of your customer not paying you by constantly monitoring your customers credit reports.
Since 1978 American Receivable has been helping our clients successfully navigate thru economic booms and busts. We are still owned and managed by our original founders, not by an out of state loan committee. Having initially focused providing factoring for the staffing industry ARC quickly broadened their market to include manufactures, fabricators, service companies, packaging, logistics, and distributors, among others. Call Jack Stieber or Brad Gurney at 972-404-4726 or call complete our quick application form.