3 Sources of Cash Small Businesses Can Tap Right Now

 Small businesses do not have access to as many sources for cash as larger companies.  The below article outlines 3 ways a small business owner may tap into funds for their needs:

https://sba.thehartford.com/finance/cash-sources/?cmp=EMC-SC-SBA-02860653&eml=1

You're the Man!

This is a very rewarding profession.  I don't mean rewarding in a financial sense... rather on a personal level.

 This has never been more true than during these difficult times brought on by the COVID pandemic.  Many businesses that never would have needed my service under normal circumstances have found themselves in unavoidable financial distress.  Whenever I am able to assist in relieving some of their account payable issues, it is always a good feeling.

 I was recently able to assist the owner of a private security company with a $13,200 debt that had escalated to a lawsuit by negotiating a discounted out-of-court settlement.  This was not an exceptionally large claim but his revenues had declined dramatically due to the ongoing pandemic and he was unable to make payment in full.  When I presented the company owner with the $7,200 settlement payable in 24 monthly installments of $300 each at 0% annual interest for approval, his email response was:

 "You're the man!!!  Excellent work!!  I agree."

Arturo R.

The payment terms I negotiated allowed my client some relief and has helped him get back on track with his business.  Pressing my negotiations for the best possible terms on behalf of my client is always my highest priority.

 

A 4 Day Negotiation

Just a few days after I closed on my longest negotiation in 23 years, I may have closed on my shortest!

On Thursday, October 8th a client retained my services and I opened settlement negotiations with the creditor company's attorney.  Due to the speed of his client's responses as we negotiated, we were able to close negotiations with a successful settlement today, Tuesday, October 13th... 4 business days.

My skilled negotiations led to a settlement of $15,000, payable in 30 monthly installments of $500 each at 0% interest on a $22,989.54 claim that had escalated to a lawsuit.  The result was a savings of nearly $8,000 on the claim, waiver of attorney's fees and court costs with a long term manageable payment arrangement for my client.

15 Month Negotiation

Most of the claims I work are resolved within 2 to 6 weeks depending on how quickly the creditors respond to settlement offers.  Occasionally, it is in the best interest of my client to delay completion and postpone payment.

 

A case I closed yesterday set a record from opening offer on July 1, 2019 to final acceptance and payment on October 9, 2020.

 

We were dealing with a large business-related debt and a commercial creditor unwilling to compromise enough for my client to afford payment.  In order to give my client time to raise funds for a settlement, we dragged out negotiations for more than 15 months.

 

The outcome was very favorable for my client with a settlement of $35,500 on a total claim of $101,400 (65% discount on the debt).

 

I want to thank you for your assistance through all of this! You always had my best interest and did all you could to help me.  You successfully helped me navigate this difficult time.  I really appreciate you.

 

Thank You Again,

Bart

Payment Abatements for COVID-19

If any of my prior clients are making settlement payments on a monthly installment plan and are experiencing cash flow issues due to the current crisis, feel free to contact me for assistance.

 

I will contact the creditor or their attorney and attempt to negotiate a temporary payment abatement on your behalf at no charge.

Payable Accounts During COVID-19

Many businesses have found themselves with drastically lower revenues or even no revenues at all during this crisis.  Unfortunately, bills still need to be paid.

Overall, I have found most commercial creditors to be sympathetic to this situation and willing to allow some flexibility with payments on a temporary basis.

I have always said communication with creditors is key when experiencing cash flow difficulties.  Although commercial creditors may be fully aware of these issues today, it is still important to remain in contact.  Not making payments along with not communicating will leave creditors with little option but to step up collection efforts.

Keep in touch with any past due accounts during this time and discuss the possibility of short term flexible payment options to help get through.  I believe you will find your creditors to be receptive and willing to work toward a manageable payment plan.

Scott F. Soape

Creative Settlements

Occasionally,  settlement negotiations require some creativity with payment arrangements.  My initial consultation with a business owner helps to identify the type of payment plan we will pursue and propose to their commercial creditor(s).

Many times, a client is able to offer a lump-sum payment for a fraction of a claim.  Most commercial creditors are more willing to compromise on their claims if they do not have to carry payments over an extended period of time.  Lump-sum payoffs typically provide the largest discounts and I have negotiated settlements for pennies on the dollar with many of these cases.

The most common settlements are structured on monthly payment plans.  Most of my clients have depleted their liquid resources by the time they retain my services and they are unable to offer a lump-sum payment.  Depending on our cash flow projections, settlement negotiations revolve around manageable monthly installments along with a discount on the principal claim.

When revenue projections are uncertain beyond a period of time, I have arranged for monthly payments with a balloon payment at the end and the agreement to reevaluate finances with the commercial creditor at that time.  This usually results in adjusted monthly payments up or down going forward.

I have also negotiated cases where my client was able to offer a larger up-front payment followed by lower monthly payments.  This usually helps to get a creditor's attention and eases their concerns about waiting for payment on the full settlement.

With over 22 years of settlement negotiation experience, I can typically steer a settlement in a direction that best benefits my client's financial situation and convince the creditor it is also in their best interest to accept.

Scott F. Soape

Invoice Factoring

Many businesses may be able to convert their unpaid or slow-to-pay outstanding invoices into cash through factoring.

Factoring companies offer to advance 80% to 90% of the total invoices for fees typically ranging between 1% to 2.5%.  Invoices are transferred to the factoring company where they then collect and extract their fee from proceeds.  Collected funds after the fee are then passed back to the business.

The below article provides a recent review of some of the top factoring companies:

https://fitsmallbusiness.com/best-factoring-companies-hartford/

Scott F. Soape