Spongetech Delivery Systems, Inc. (fka SPNGQ)

[CYRXorbust]

you are 100% correct that getting a standard line of credit from a bank would be better than the factoring route but if its the only game in town what can you do. why is it the only game in town, perhaps the SEC investigation and lack of financials.

but we should keep in mind that just because we have this financing option there doesn't mean we have to use it for every A/R that is outstanding. for instance if walmart owes us a total of say $5mm over a # of shipments and SPNG needs the cash to pay a settlement they could access the $300k or so as needed. sure the haircut hurts a bit but such is life. if they could get cheaper funds they would have but bottomline is they are in business and growing. their cash crunch is no new surprise to anyone so i see this as a step in teh right direction