Cash flow

How to Boost Your Cash Flow When Government Funding Ends

Right now, small and mid-sized (SMB) businesses face renewed uncertainty around COVID-19.

Across North America, cases continue to rise in several hotspots as we begin autumn, a period typically tied to colder weather and flu season.

Ongoing worries about new shutdowns come at a time that the Canadian government is poised to transition away from its emergency lending programs and streamline unemployment benefits. On September 27, Canadian officials plan to transition to a “simplified Employment Insurance (EI) program” star, according to a report from Employment and Social Development Canada. The program will shift toward benefits for individuals who are unable to work.

Meanwhile, politicians have shown little willingness to address small business lending again ahead of a partisan election season in the United States.

Small businesses should operate under the assumption that governments are tapped out and new programs are not coming soon. Rather than seek funding from traditional banks, small businesses should be aware of a fast, practical solution that can put working capital into their accounts within one business day. Let’s break down your options.

Is an SMB Credit Crunch Coming?

The shift in government priorities is difficult for SMBs, given today’s economic reality.

According to the latest data from the CFIB (September), Canadian small businesses are still far off from running at full capacity. Just 64% of respondents are “fully open” right now. Meanwhile, only 41% are “fully staffed.” Finally, just 28% have said they have “normal sales” compared to historical performance.

That latter figure has heightened concerns about cash flow among small businesses. Even before COVID-19, poor cash flow was the number one reason why small businesses fail, according to a 2019 study by Intuit. Roughly 60% of companies faced cash flow problems, the study says.

While companies can take several steps to improve the state of their cash flow, the most likely approach is securing new funding.

Many small and mid-sized businesses will turn to traditional lending as government lending programs dry up. However, banks may tighten credit standards. With more competition for less lending capital, startups face even greater odds.

Banks will likely reject applications from companies with less than two years of credit history. The Federal Reserve says traditional banks reject 80% of small business applications for funding.

There is an alternative. It’s called invoice funding, and it’s a fast, practical solution that dramatically reduces the time it takes to access working capital.

By definition, an invoice is a financial instrument that can be exchanged as collateral for loans or instant working capital.  With invoice funding, you sell unpaid invoices to a company like FundThrough for the money you need.

Invoice factoring services allow you to improve cash flow management and determine the time of payment on your terms. Rather than waiting for 30, 60, even up to 150 days for payment, you can self-fund your business.

Sadly, not every company takes advantage of this benefit.

How and Why It Works

Invoice funding provides a significant number of benefits to companies facing a cash flow crunch. Instead of waiting longer and longer for large customers to pay their bills, companies can get unlimited funding based on the full value of outstanding invoices.

There are many examples of how invoice funding helps small businesses survive and thrive during COVID-19 while avoiding the need for more government or bank funding.

  • For example, Urban Farms was able to keep food on the shelves at grocery stores by having a constant source of capital to purchase commodities and move them up the supply chain;
  • Meanwhile, Global Pipeline navigated a difficult economy for oil-and-gas producers. With invoice factoring, the firm avoided 60-day waits for customer payments. Instead, they cut down the wait by 98% and received money with a day to use for more competitive bids and to prospect even larger clients; and,
  • Concept Media, which struggled to navigate bank loans and government payments, used invoice funding to keep their retail operations moving. The company survived and thrived the 2020 COVID shutdown and got access to working capital on its terms.

Small business owners and accountants can get started by syncing QuickBooks Online accounting software with the FundThrough app. Once they create an account and answer a few questions about their business in a simple application.

Approved businesses can then select which invoices they want to fund and receive money into their account quickly.

About FundThrough

FundThrough is a leading fintech company that enables businesses to access unlimited capital based on the value of their outstanding customer invoices. Its platform lets businesses connect their accounting software and directly submit invoices for funding. On average, FundThrough improves its clients’ cash flow position by reducing their wait time by 97%. The company serves clients across the United States and Canada.

For more information, please visit

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