The COVID-19 coronavirus is significantly impacting businesses and the economy of every country around the globe, and the United States—unfortunately—is no exception. The new disease had a catastrophic impact on businesses, particularly SMEs, that are trying their best to survive during the lockdown.
Companies are taking radical measures like including salary reductions, withholding bonuses, debt restructuring, and pulling short-term investments, among others, to meet their working capital needs. Still, the lack of cash inflow is proving to be too much to handle for many organizations, especially those with no cash reserves to rely on.
If your business is suffering from a financial crunch and find it difficult to manage its working capital, asset-based lending can be a good option. It allows you to raise finance by keeping your business asset as collateral. In this article, we’ll discuss how asset-based lending can keep your business afloat during the COVID-19 pandemic.
Let’s get started!
How Asset-based Lending Can Keep Your Business Afloat During the COVID-19 Pandemic
The recent crisis has led to an increase in pre-invoice as businesses seek to raise working capital to ensure their business continues to operate as a going concern entity. However, this technique, along with other measures like withholding vendor payments, is an impractical approach to keep a business afloat during the COVID-19.
A number of lending institutions around the country have offered fee relief and interest deferrals to help struggling businesses get up on their feet; however, the traditional lending remains available for many companies, who are facing bankruptcy due to the cash-flow squeeze resulting from lack of business.
Here, asset-based lending can help businesses inject much-needed cash in their working capital so they can meet their short-term obligations and run day-to-day operations. Businesses can use their inventory, accounts receivable, and machinery as collateral to obtain quick financing to survive the pandemic.
It’s a perfect way for businesses to raise quick financing and pay their employees, vendors, and other creditors for the next few months. Asset-based loans are easier and quicker to obtain and require no guarantors as the finance is secured by collateral. Furthermore, it comes with a lower interest rate compared to many funding options.
Every crisis comes with an opportunity for competitive reinvention. It’s fair to assume that companies that can strategically rethink their operations and manage to remain afloat during the COVID-19 pandemic will be able to capitalize on these opportunities and emerge from the crisis stronger than before.
About Global Capital Partners Fund
Global Capital Partners Fund is a reputable asset-based lender in the United States that provides a range of financial solutions, including bridge financing and hard money loans. The company also helps businesses to raise quick working capital by providing asset-based financing. For more information about their services, call at +1-800-514-7350, or visit their website.