How to Manage Your Small Business Post PPP Funding

By 08.04.21June 3rd, 2022No Comments
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As the business disruptions of 2020 become memory and the new challenges of a resurging economy continue to develop, small businesses are having to balance growth opportunities with limited sources of funding. As they rise to meet the demands of an altered economy, SMBs are adapting new approaches to meet changing customer needs but face a growing challenge in sourcing funding options. The ending of the Paycheck Protection Program (PPP) on May 31, 2021 intensified the need for small businesses to find creative funding solutions able to support operations through an uncertain economy in flux. A reputable invoice factoring company is the ideal financial partner for small businesses in need of a flexible financial recovery plan.

Develop a Financial Recovery Plan

2020 will no doubt be recorded as one of the worst years for small business operations in modern history. For most SMBs it surpasses the devastating effects of the Great Recession that ravaged businesses 12 years ago. The financial crisis of 2007 to 2009 was a business-to-business catastrophe, the pandemic instigated a business-to-consumer meltdown that will reshape the economy and give rise to a new normal.

During the pandemic, businesses and industries that utilize or adapted to online shopping fared well, as did business that were able to transition their workforce to remote environments. Brick and mortar businesses such as retailers and manufacturers suffered a devastating loss of business as shutdowns were imposed. For millions of businesses, PPP funding was vitally important to soften the impact of the crisis and to stay afloat. Now that PPP funding has ended, these businesses need a financial recovery plan to get back on track. Now is the time to fully investigate commonly used alternative forms of financial assistance.

Facing the Financial Challenges That Lay Ahead

The ending of PPP funding and the opening of an uncertain economy has heightened the difficultly small businesses have when seeking financial assistance from traditional commercial lenders. This is not a new challenge, it is a continuation of a past trend. The massive injection of cash that the recent PPPs provided to small business masked a contraction in SMB lending that was already underway before the onslaught of coronavirus. Banks are lending less to small companies than they did previous to the financial crisis and the Great Recession – instead, they are ramping up big-business lending which is far more profitable and has much less risk involved.

Use Invoice Factoring to Meet Working Capital Needs

Generally speaking, banks use the five C’s of credit and look in the rear view mirror to assess a company’s qualification for funding. If the business has performed well, shows signs of sustained profitability, maintains a good credit rating and operates in a stable environment, then advancing credit to the business is properly considered. For most small businesses in today’s market conditions, the likelihood of securing a bank loan is slim to none – a financial solution from a non-bank lender is needed to support operations and grow.  Invoice factoring is designed as a flexible funding solution to provide small businesses easy access to working capital.

Invoice Factoring 101

How does invoice factoring work: it’s a simple process.

  • Invoice your client for services or products provided and send copy invoice to the factoring company.
  • The factoring company verifies the invoice and transfers up to 90 % of the invoice face value directly into your account within 24 hours. The balance owing is held as a reserve.
  • When the factoring company receives the full invoice amount from your customer, they release the reserve and transfer the balance owing to your account.
  • A small fee is deducted for the transactions.

Services are easy and convenient:

  • Qualification for invoice factoring is quick and easy for any size business, whether it’s a start-up or an established company. As long as the business invoices credit worthy business customers, they are well on their way to first funding.
  • Invoice factoring is easy to manage. A dedicated account manager streamlines services, and an online portal provides real time monitoring of transactions, balances and credit limits.

Benefits of Invoice Factoring

  • Immediate access to working capital means meeting financial obligations without delay. If converting invoices into cash within 24 hours is still not fast enough, a forward-thinking alternative lender such as eCapital will work with you to develop an adaptive approach and devise a working solution.
  • A reputable invoice factoring company provides back-office support free of charge. This feature allows companies to concentrate on their core business rather than chasing customers for payment. This improves accounts receivable efficiencies and helps to improve the company’s credit score.
  • Credit limits grow as your company grows. This allows SMBs greater access to working capital as it evolves through the various stages of business development. Invoice factoring is the only funding option that is tied to sales – the more you invoice customers, the more working capital becomes available.
  • Invoice factoring does not incur debt – it is the selling of invoices at a discount in exchange for immediate cash. Because it is not a loan, funds are not governed by restrictive covenants, the money made available is your money and can be used in whatever means you direct.

Creative Funding

2020 was an exceedingly hard year for businesses in general. Depleted financial resources meant many small businesses needed PPP funding offered by the federal government to retain staff and stay afloat. Now that the program is over, these businesses have to apply for “loan forgiveness”, or plan to repay the loan – an added burden to complicate the difficult financial obligations that still remain.

As business ramps up to meet the needs of a recovering economy, SMBs will benefit from a growing economy driven by a significant increase in consumer spending. As business opportunities grow, the draw on working capital increases. The flexible nature of invoice factoring administered by a solution focused alternative lender provides the creative funding options needed to meet the working capital needs of small businesses.

For more information about invoice factoring as a flexible funding solution, visit

eCapital Logo

eCapital Corp. is committed to supporting small and middle-market companies in the United States, Canada, and the UK by accelerating their access to capital through financial solutions like invoice factoring, factoring lines of credit, asset-based lending and equipment financing. Headquartered in Miami, Florida, eCapital is an innovative leader in providing flexible, customized cash flow to businesses. For more information about eCapital, visit

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