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C2FO Joins Call for New Lending Facility for U.S. Companies Affected by COVID-19

Kansas City, USA (July 8, 2020) — C2FO, a global provider of working capital solutions, has joined in a coalition of 21 retail, manufacturing and business associations calling for the U.S. Department of the Treasury and the Federal Reserve to create a lending facility for companies facing short-term liquidity issues due to the COVID-19 pandemic.

The coalition contains the American Institute of CPAs (AICPA), C2FO, the National Association of Manufacturers, the U.S. Chamber of Commerce, the National Retail Federation, the American Apparel and Footwear Association and 15 more industry organizations, all focused on the needs of American businesses and the desperate help they need now.

While the federal government has directed trillions of dollars toward helping companies during the pandemic, those efforts have not been enough to address the liquidity issues faced by many small to mid-sized businesses. In April, C2FO called for the creation of a Small Business Supplier Protection Plan to help solve an estimated $16 trillion in trapped liquidity for businesses around the world.

“As a company that provides working capital solutions for more than one million businesses globally, we completely understand the liquidity challenges many of them are now facing,” said Jerod Laughlin, chief marketing officer for C2FO. “We’ve appealed to government leaders and central banks worldwide to create low-cost funding specifically for larger companies to pay their small to mid-sized suppliers immediately. We believe the coalition led by the AICPA and supported by C2FO is an important step in providing fast relief for businesses in the U.S. that have been adversely affected by COVID-19.”

In a July 1 letter to Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell , the coalition stated that the pandemic has created acute liquidity risks for small businesses — including manufacturers, retailers and service providers — that is constricting supply chains. The challenges for companies include the following:

  • A slowdown in accounts receivable payments, from 30 days to 90 days or more.
  • Difficulty forecasting cash flows, harnessing sufficient cash and maintaining other short-term assets to continue operations.
  • Suppliers’ limitations on the normal flow of goods to buyers.
  • Suppliers’ hesitancy to offer typical credit terms because of the U.S.’ extraordinary economic conditions.

The coalition’s letter calls on the Federal Reserve and Treasury Department to create a lending facility, or facilities, to help suppliers and buyers address short-term liquidity issues. These facilities would provide relief to companies to create immediate cash flow and support for normal trade terms, and a return to normal business operations.

“Importantly, the Treasury Department can tap into the remaining approximately $200 billion of unused CARES Act funds to provide support for these businesses,” Barry Melancon, president  of AICPA, said in the organization’s recent news release. “Unfortunately, existing lending programs, such as the Paycheck Protection Program, Economic Injury Disaster Loan and Main Street Lending Program, provide limited assistance to businesses facing liquidity and credit risks. The PPP is primarily focused on helping businesses with their current payroll needs and does not address ongoing cash flow issues, while EIDL and MSLP are longer-term solutions that don’t specifically address these short-term and immediate problems.”

The AICPA, C2FO and their coalition partners also predict that short-term liquidity issues will continue beyond the duration of the pandemic. The July 1 letter states, “Furthermore, short-term liquidity problems will impact individual businesses on a revolving basis, potentially impacting every contract and supplier transaction for the next 12 to 18 months.”

About C2FO

C2FO is working to deliver a future where every company in the world has the capital needed to grow. Our online platform matches more than $1 trillion of accounts payable and accounts receivable. Through this and our suite of innovative financial products, we connect businesses with the cash they need. Name your rate, and the C2FO platform will match your capital request with the available funds in seconds. Cash flow comes through early payment of invoices by your customers, A/R financing, and other data-driven funding options. C2FO is the world’s largest non-bank provider of working capital, serving over one million customers representing $10.5 trillion in annual sales across more than 180 countries. To learn more, visit C2FO.com.