Alternative Financial Aid During COVID-19
The COVID-19 Economic Response Plan has helped many people during the current crisis. The Government of Canada has promised to provide as much as 27 billion dollars to both workers and businesses. However, there are many people who are still unable to tap into the resources the government has offered.
It has been over two months since the Prime Minister addressed the need to stabilize the Canadian economy by helping Canadian businesses. The Business Credit Availability Program (BCAP) has allowed many companies, including small to medium-size businesses to stay up and running. However, certain businesses are unable to obtain monetary compensation because they are ineligible for government financial aid.
The bank of Canada has also taken steps to relieve economic stress on both households and business. They have reduced interest rates and helped financial institutions to continue extending credit to those who need it. However, there are still businesses that do not meet the requirements needed in order to receive adequate credit to continue operations.
For those businesses that are not being compensated, it is important to find innovative ways to ensure financial stability. Some viable options include crowdfunding , micro-lending , a line of credit , as well as grants and loan programs . These funding options work for many small and medium-size businesses. Even still, these options do not work for all businesses depending on their various restrictions and requirements.
If you have looked through all of these options without finding the right fit for your business, Express Business Funding (EBF) is here to help Canadian businesses thrive. EBF offers several financial aid alternatives that could be the perfect solution to your business needs during the COVID-19 crisis.
Here are financial services that EBF provides for small to medium-size businesses:
Factoring consists of selling your business’ invoices at a discounted price to a factoring company. Your business will receive an immediate cash advance for the purchased invoices. After a factoring company has bought your invoices, they own the invoices and wait to be payed by your clients. Instead of your business waiting for your clients to pay you within 30 to 90 days, a factoring company does the waiting and you are able to maintain a healthy cashflow as a business.
Purchase Order Financing
PO financing is similar to invoice factoring, as it keeps your cashflow consistent. Your business receives capital upfront from a finance company so that you can pay your suppliers for purchase orders immediately. Essentially, you receive the upfront cash that is required to pay for the finished products that your business purchases. This option can potentially cover the entire cost of the products you need to purchase before you deliver to your customers. There is also no longterm commitment to a finance company, so if your order volume drops and you no longer need funding, you can stop using their services at any time.
Unlike most of the financial aid options above, EBF offers asset based lending for your business. This means that “we provide funding based on the credit strength of your customers as well as their ability to honour purchase orders and pay their invoices”. We also look at the value of your company’s assets when we consider providing additional funding.
EBF makes it easier for new and small to medium-sized companies to qualify for various forms of financing. Whatever your situation is during this crisis, there is a financial solution out there that will work best for your business.
Express Business Funding