> But in order to pay his employees to go construct the pole barns, he needed loans, leveraged against the future income from the construction project. Rather

> But in order to pay his employees to go construct the pole barns, he needed loans, leveraged against the future income from the construction project. Rather than collateralized loans, a better financial instrument might have been factoring (selling the receivable outright, typically for 90-95¢ on the dollar), plus having a reasonable penalty clause in the contract. This isn't a criticism. Hardly anyone outside of the fashion industry (that has long waits, like net-90, for payment after eventual delivery) or heavy industry (that has expensive equipment that can be amortized long-term) seems to know about factoring.