Using an ERC Loan to Power Growth in an Uncertain Economy
Using an ERC Loan to Power Growth in an Uncertain Economy
Blog Article
The Intersection of Volatility and Bureaucratic Backlog
2024 and 2025 have brought their share of surprises. Small businesses have seen interest rate hikes, market fluctuations, supply chain instability, and now face the ever-escalating threat of trade wars on several fronts. In this environment, cash isn’t just comfort – it’s strategy. That’s why more business owners are exploring creative financing options like the Employee Retention Credit loan to unlock frozen capital and keep their businesses financially flexible.
Let’s look at how businesses are using ERC funding not just to survive IRS delays—but to build long-term strength in an uncertain world.
The ERC Backlog: A Real Problem for Growth Businesses
The IRS has slowed processing for ERC claims significantly. Some businesses are seeing wait times exceeding 12–24 months, with no clear timeline for resolution.
That’s created a frustrating situation, in which businesses have already qualified for the ERC, know that the funds are owed to them and coming eventually, but they can’t count on when or rely on the availability of those funds to protect their business.
This problem is doubly frustrating for small businesses that are in a growth cycle. Growing businesses require a lot: entrepreneurial spirit, creativity, a dedicated team, and a solid plan. However, more than anything, they have two major needs: cash, and flexibility. Many businesses were relying on ERC refunds to provide them with cash to continue to grow. But with IRS processing backlogs piling up, a lot of entrepreneurs looking to grow are forced to turn to alternatives like high-interest debt or giving up equity in their business as ERC processing has stretched for years, with no end in sight. So what are growth minded owners to do?
Enter the ERC Loan: A Tactical Advantage
An ERC loan offers an immediate injection of cash, using your pending refund as leverage. Unlike traditional loans, ERC loans don’t require you to prepare a lot of complicated revenue projections or share your long-term credit history. Approval is based on the value of your claim, with the lender taking on the risk of processing times that might yet stretch out for months or years to come.
And businesses that receive these loans are able to undertake projects that benefit them in both the short and long term. Businesses can use these funds to pay down high-interest loans and website credit card debt, hire key talent before their competitors can, improve employee wages and benefits to drive talent retention, launch new products and services, invest in marketing and promotion at a time when competitors are pulling back and advertising is becoming cheaper, build working capital reserves, and invest in customer acquisition. All of these activities allow businesses to take advantage of having capital at a time when capital is becoming more expensive to acquire on the open market, and they may mean the difference between a business that doesn’t survive economic uncertainty and one that thrives in it.
Why Now?
Many business owners may see all this and think “that’s all well and good, but I’ve been waiting this long – why not just ride it out until the IRS finally processes my claim?”
The answer is multifaceted. The most obvious answer, of course, is that economic unpredictability and volatility are currently running rampant through every aspect of the market. With economic indicators shifting, having cash now could mean your small business can achieve important goals such as: locking in costs of materials and services before prices rise again; taking advantage of distressed assets and opportunities like buildings and capital goods as competitors withdraw from the marketplace; avoiding risky short-term borrowing at rates that seem to simply keep rising; and making key investments in personnel and technology that can put your business ahead of its competitors for good.
How an ERC Loan Works
An ERC loan is a financing product based on your approved but unpaid ERC refund. You get an advance on the expected amount—typically 70 to 90%—and repay the loan when your refund finally arrives.
In some cases, businesses opt for a full ERC claim buyout, where there’s no repayment involved. But even as a loan, this type of funding is unique:
No new sales required to qualify
Minimal paperwork
Based on a credit you’ve already earned
These factors can make them particularly attractive for growth businesses that may be confident about how they will use capital to fuel further expansion, but who may not be able to show the kind of metrics that would qualify them for more traditional financing products.
ERC Loans vs. Equity Financing
An alternative to debt often used by growing business is equity financing – bringing in investor cash in exchange for an equity share of the business. The problem with this approach, of course, is dilution. Once you’ve given up a piece of your business for a quick cash infusion, it’s gone, and your ownership share gets smaller. Keep cutting the pie into smaller and smaller pieces, and you’ll eventually find you don’t have much left for yourself.
Think about it this way: if your business grows the way you’re planning, will you be glad in 5 or 10 years that you had to give part of it away to finance that growth? If the answer is no, it’s time to explore your alternatives.
What to Look for in an ERC Funding Partner
Whether you’re exploring a loan or a claim sale, choose a firm that offers:
Transparent terms
No hidden fees
No prepayment penalties
Responsive support
Proven ERC experience
You’ll want a team that can move quickly, answer questions clearly, and ensure compliance is never in doubt. At ERTC Funding, we have the experience to get you the right answer, fast, and we have the connections to ensure you get the loan with the best possible terms.
Real-World Example: Growth Made Possible
Let’s say your business is eligible for a $200,000 ERC refund. But the IRS says it may not be processed until late 2026.
By financing $170,000 of that claim right now, you could:
Pay off $50K in short-term debt
Spend $60K on a lead-generation campaign
Use $60K to boost seasonal inventory
Even with relatively low cost of interest payments, you come out ahead by putting that capital to work now, not in 18 months.
Don’t Let the IRS Decide Your Timeline
In today’s market, waiting is expensive – perhaps prohibitively so. An ERC loan or claim buyout gives you options when you need them, helping you stay ahead, not stuck behind government delays.
Explore Your Options
Want to see how much you could unlock from your ERC claim? ERTC Funding (ertcfunding.com) offers fast, flexible access without the complexity of traditional lending. Reach out today and learn more about your options.
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