Entrepreneurs Respond to Operation Warp Speed With Innovative Financing

The last twelve months have left an indelible mark on our world, forever altering what we once viewed as “normal.” This year has begun with hope, however. With multiple COVID-19 vaccines in circulation in the U.S. and around the world, remnants of our old “normal” are beginning to reappear. Businesses are slowly bringing employees back into the office after a year of working remotely and more businesses and communities are opening back up.

Innovative Financing

While some companies will emerge from the turbulence of the past year unscathed, many more will not. For those experiencing new growth at the start of 2021, a new reliance on non-traditional funding opportunities may help recoup some of the losses and begin a brighter future. That’s because businesses that have struggled over the past year may find it hard to secure capital injection from more “traditional” lenders this year, simply because their financial performance from the past year was impacted by the pandemic. At non-traditional financier Star Funding, however, focusing on future opportunities instead of the past financials helps provide new options for growing business owners.

In one particular instance, a start-up medical supplies company was tasked with supporting product procurement for the federal government’s Operation Warp Speed. It was a public-private partnership established to accelerate the development, manufacturing, and distribution of covid-19 related vaccines and supplies.

When presented with a large opportunity to procure syringes and needles for vaccine deployment, a young contractor approached Star Funding in search of financing support. The company was one of a handful of businesses selected to collectively provide more than $900,000,000 worth of vaccine related supplies.

Large Purchase Order Expectation

The new contractor secured their contract and the next step was sourcing the financing to help deliver. The company found traditional financing structures like banks or asset-based lenders were not able to support their startup with such a large transaction. Also, contrary to a popular belief that “If you get the PO, everyone will want to finance it,” many purchase order financing companies and accounts receivable factors shy away from government purchase orders. With the help of Star Funding, however, the company received full support covering 100% of their cost of goods and logistics to ensure their goods were delivered on time.

Essentially, if you own a business that suffered heavy financial losses in 2020 and are struggling to get financed via your bank or credit card company in 2021 due to this, your options moving forward would otherwise be limited. However, if your company is expecting large purchase orders in 2021, this could present an opportunity to get financed through Star Funding’s innovative model.

Funding Based on Potential Opportunities

As a privately-held financing company, Star Funding offers two main forms of non-traditional financing options to businesses seeking capital injections: Purchase Order Financing and Accounts Receivable Factoring. Rather than focusing on a company’s historical financial statements, such as the past two years’ profit and loss and balance sheets used as a determining factor by many traditional lenders like banks and credit card companies, Star Funding analyzes the opportunities in front of each client-company and funds them accordingly based on the size of the opportunity itself. For example, for the food and beverage industry, 2020 was catastrophic. Many businesses, employees, and their manufacturing and distribution partners, suffered as restaurants closed their doors.

“A number of companies in PPE and medical supplies space are coming to Star Funding and saying they are up against heavy demand,” said Avi Levine, Vice President of Star Funding. “They don’t have the cash to produce the number of goods they have projected to need for the upcoming months. But if those companies come to us with a fantastic opportunity for growth on their table and purchase orders from government agencies or hospital systems, we can finance the production of their goods. We don’t look at your historical finances or 2020 balance sheets as a deciding factor, instead, the deciding factor in getting financed through us is how big the opportunity is in front of you, and what you need from us to help you succeed.”