It’s no secret that small businesses are an integral component in the recovery of the U.S. economy. The Small Business Administration (SBA) notes that, “access to funding for small businesses is a part of job and economic growth,” but also points to a severe issue facing funding for these businesses: bad credit.
The SBA, in a post by Marco Carbajo, notes that, “Unfortunately, bad credit plagues a large percentage of small business owners…The fact remains that it’s harder for smaller businesses – even with stellar credit ratings – to get traditional bank loans than it is for larger businesses.” Bad credit then, is serving as an impediment to economic recovery.
The difficulty of small businesses being able to obtain bank loans go beyond anecdotal insights, and include quantitative, survey-based data. The Coleman Report for example, highlighted results of an economic survey conducted by Pepperdine University that shows that while 59% of respondents attempted to obtain funding from banks, a mere 27% of the respondents received loans. That same survey notes that, “67.7% of [the respondents] expect it will be difficult to raise debt financing in the next six months.”
The Coleman Report also points to information collected by small-business insurance provider Hiscox report, which states that, “95% of respondents to a survey of 500 business owners say getting funding for a new business isn’t easy.”
Overnite Capital is Different
Unlike traditional bank lines of credit, that focus on a credit score, factoring focuses on receivables from customers and their ability to pay. Where lines of credit may be denied to companies with high growth curves, factoring is a great option, based on a company’s customer base.
In the factoring process a business owner is, in essence, selling his or her receivables to Overnite Capital. Typically, the company will receive 80-90% of the receivable, with receipt of the remaining balance after the customer has paid the invoice. Overnite Capital supports various sectors, including: manufacturing, apparel, staffing and trucking and government contractors and handles factoring lines of credit from $100,000 to $3 million.
Overnite Capital also focuses on helping out small businesses in a manner where the credit score is not the sole indicator of a businesses’ worthiness for funding. Overnite Capital believes that helping small business owners by providing them with the cash flow they need is important for the recovery of the economy. Take the steps to secure an immediate cash flow by contacting Overnite Capital today!