Credit Restrictions Conjures Up Alternative Financing*

Credit crunch solutions seem to be the wave of the future when it comes down to alternative financing, specifically for highly-leveraged companies in Corporate America today.

In fact, many small-to-mid-size businesses across the country, are facing credit-constraints, and sometimes must conjure up extra cash to keep the lights on in the front office until their next invoice rolls in before they see the hard currency show up in their bank accounts.

These firms frequently require alternative finance plans that work around traditional barriers to capital while backing up injections of funds with hard assets.

“Many small/mid-size business “C” level officers still do not understand secured lending. They really don’t understand the types of financing that are available which are not traditional from the banks,” said Richard W. Lewis, the CEO and President of Financial Engineering Counselors, Ltd. “Many bankers don’t /really understand factoring, purchase order financing, or foreign sales and collections.”

Financial Engineering Counselors, Ltd. is a firm based in Washington, D.C., that develops financing solutions for government contractors, commercial service-providers, constructions companies and occasionally medical firms. The firm leverages its relationships with bank and non-bank lenders to identify alternative financing options for clients, Lewis told The Suit Magazine, adding that many of the firms he worked with are those growing too fast, or with immediate needs to fulfill contracts or orders in the awkward time between closing, invoicing and payment.

Alternative financing tools have attracted more media attention lately. According to a 2014 Harvard Business Review article, alternative financing tools represented $10 billion worth of small business capital nationwide. That’s not much compared to the $700 billion total in small business bank credit assets, but it’s a number that ballooned during the ’08 financial crisis.

Secured lending, purchase order  and accounts receivable financing – when a bank, or other organization, buys an invoice and advances a portion of it upfront, but maintains control over the funds – are just some alternative financing tools Lewis calls upon to help his commercial and government clients.

Lewis brings 40 years of experience as a financial professional, CEO of public software development company, start-up leader, banker, and government services consultant to the table and combines this expertise into actionable plans for his clients.

“You have to keep your eyes on the road all of the time. There are always little things going on with the government,” he said, referring to frequent rule changes and the ever-evolving purchasing habits of government agencies.

Alternative financing agreements can bolster businesses during down economies, when traditional credit routes dry up, as well as opportunities during recovery and fast growth periods.

Richard W. Lewis, President
Financial Engineering Counselors, Ltd.
Falls Church, VA 22043
703.992.8988 Direct
703.625.3782 Mobile
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*Does not include Peer-to-Peer (P2P) and Online Platform Based Business (OPB) Lending, about which Lewis has his personal views.

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