Let’s say you have had strong orders for the holidays and need working capital. After spending hours upon hours putting together a bank loan application, submitting it and waiting 30 more days for a decision, and it’s “No.” According to a 2013 survey by the Federal Reserve Bank of New York, 47% of small business loan applications are denied. By this point money is tight and patience short. Take a breath, all is not lost.

There is a working capital solution.

Alternative lenders, like Overnite Capital, have finance products (factoring lines of credit) that step in to fill the working capital void where local, business-friendly bankers used to live.

Of particular interest is this time of year when the holiday cycle is ramping up. If you’re a manufacturer or wholesaler, your goods are finished and on their way to retailers. Next comes invoicing, depending upon the terms agreed upon with your customer you can expect payment of your accounts receivable in 30- 45- or even 60 days.

In the meantime, your capital is tied up in holiday goods, your suppliers and sub-contractors want to get paid, and there are orders to fill that reach beyond the holidays. Believe it or not these are good problems to have. It means your business is healthy, even if it’s pinched for cash.

How factoring works.

Those accounts receivable (A/R) you sent out, that are sitting in payment limbo, are assets that can be leveraged to provide you with the working capital that keeps your business growing.  This is called factoring. With your A/R in hand, a Overnite will walk you through the quick and painless application process.

It’s not a matter of the credit standing of your business, or how long you have been in business, or your personal or commercial checking account balances. It’s about the credit worthiness of your customers and their ability to pay.

So once your invoices are sent and received, Overnite will verify them and run a financial check on your customer. Once the customer is OK’d, 80% (it can vary) of the A/R will be deposited to your account within about 24 hours. You have your working capital to grow your business.

When the customer pays the factor, you get the balance, minus the factoring fees. Seasonal lending supports your business during crunch time. It’s simple and sensible.