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How the Election Affects Your Factoring Business

November 12, 2012 by  

A look a how the business of factoring will be impacted by the election results and economic issues.

Election and Factoring BusinessThe election is over and no matter what side of the political fence you reside, the people have spoken. President Obama returns for four more years with a divided congress consisting of Republicans controlling the House of Representatives while the Democrats retain their majority in the Senate.

No matter who was victorious in these races, tough issues lie before our elected officials.

The latest unemployment data released by the US Bureau of Labor Statistics remains close to 8% as of November 7, 2012.

The fiscal cliff is looming which includes the expiration of specific tax cuts while at the same time spending cuts of over 1,000 government programs including the defense budget and Medicare.

According to the National Small Business Association, “The bevy of tax provisions set to expire at the end of 2012 will exacerbate small-business economic woes and uncertainty”.

The picture isn’t much brighter overseas as Europe continues to slide into a recession. Countries like Greece and Spain are still trying to figure out a way to reign in their debt through the help of third parties.

That’s the big picture. So how does all of the news affect your factoring business?

The general consensus is that the rates for lending will remain at all time lows while underwriting guidelines remain tight. In essence, there’s cheap money out there but it’s difficult to qualify.

Small to medium sized business will continue to feel the squeeze as they search for capital to sustain operations and fuel growth. The need for alternative lending by factors and asset based lenders will remain strong to fill the void from traditional lenders.

Experience has taught us that factoring is a useful tool for many businesses in both good times and bad.

We feel fortunate that many of our clients participate in industries that are experiencing significant growth. The capital that we provide by purchasing their receivables allows them to increase sales and hire additional staff. Conversely we have also experienced the need to further tighten our due diligence procedures with new prospects. We are finding that the applicants in many cases have more “issues” than the account debtors.

The need for capital will always exist for startups and existing business. It’s our jobs as factors to identify, qualify and fund. Well, at least the ones that qualify.

Don D’Ambrosio is the president of Oxygen Funding, Inc., an invoice factoring company located in Lake Forest, California.

For more information, he can be reached at or you can visit his company’s website at



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