Financing Business Transitions in California: When the Bank Won't Return Your Call

Financing Business Transitions in California: When the Bank Won't Return Your Call

Accutrac Capital 0 Comments
Any California business owner who's had their business go through a transition will tell youÉtransition can put a huge strain on cash flow. Unfortunately, these are often the times when traditional lenders, like banks, put the brakes on extending financing. That's true even when the transition is a positive one. Change, especially drastic change, can give many traditional lenders cold feet.

Why factoring remains strong even in times of business transition

Factoring is one source of alternative financing that maintains its strength and availability even during times of business transition. Why?

Traditional lenders base their qualifications on your California company's income history, credit rating and current stability. Because factoring involves selling your accounts receivable invoices to a factoring company at a discount in exchange for immediate cash, qualifying for factoring is based on the creditworthiness of your customersÉnot yours. As long as you continue to do business with creditworthy customers, you continue to qualify for factoring.

Why do California businesses go through transition?

There are many reasons why a California business might be experiencing a transition:

  • loss of a partner or key employee
  • restructuring
  • mergers and acquisitions
  • moving facilities
  • recovering from a tough financial year
  • re-branding

These can be planned changes such as restructuring to better compete in your market. Or these can be changes forced upon a company, for example through the death of a partner.

Why do business transitions put a strain on cash flow?

When you think about the additional costs your California business can incur during times of business transition, it's easy to see how costs can quickly hit a cash flow wall. The costs of business transition can include:

  • moving equipment and furnishings to a new facility
  • legal and administrative costs of restructuring
  • recovering from the loss of knowledge capital when a partner or key employee leaves or dies
  • re-branding marketing materials
  • the costs of communicating change

These all pile up on top of a business's regular operating and production costs to put a strain on cash flow. Having a back-pocket plan, that includes factoring, to keep your business's cash flow flexible can have a huge impact on experiencing a successful business transition.

Manage cash flow through times of change with Accutrac Capital's unique Factoring Line of Credit

When extending or getting financing through traditional lenders isn't an option, consider Accutrac Capital's unique Factoring Line of Credit. Because qualifying is based on the creditworthiness of your customers, it's easier and faster to obtain than a traditional business line of credit. It's unique because Accutrac manages your invoicing and receivables and provides you with a line of credit equal to up to 90% of your outstanding invoices. You make no payments because your customers pay Accutrac directly. And, you only pay factoring fees on funds drawn.

For more information about factoring for California businesses in transition, visit


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