Do you own a business or you may work as a commercial contractor? Regardless of what kind of business you run, you need a 'Cash Cow' to have a constant flow of working capital that will never dry up.
Any small-business owner knows that liquid cash is the most pivotal life energy to sustain a business and grow for a long period.
The faltering economy and shaky lending market are not showing any beacon of light either.
To be specific, banks are actually nervous these days when considering to lend to small businesses.
Some banks are even pulling the plug on their business client's line of credit.
If this situation goes on, the supply of new business will terminate, and the companies' steady growth and retained earnings will be weakened severely.
If you are feeling similar financial heat, then wait no longer and opt for accounts receivable factoring.
A factoring credit line will provide your business the cash it needs.
Here, your accounts receivable invoices are key, since these will get converted into saleable assets and bring cash into your business.
There have been innumerable instances where lack of working capital forced small business owners to take desperate steps.
To keep their companies alive, they got into cost control, mortgaged their homes, utilized the maximum level of their credit cards and used up their 401 (k) benefits, etc.
All of these efforts proved to be make-shift arrangements and they were unable to generate a steady flow of cash.
Rather, by taking up these various ways of getting cash, they could end up in a financial tangle and lose an entire life's savings.
It is understandable that lack of cash can create serious tension, desperation and panic.
But to resolve this situation, you must find a suitable option that will get you cash without incurring further debt.
That's when accounts receivable factoring comes to the rescue.
While doing business, your receivables from customers are usually due in 15, 30, 45 or 60 days.
Sometimes your customers will request more time to make payments, and you agree to their request to maintain good business relations.
At the same time some immediate requirement of cash may crop up to purchase inventory, cover payroll, and other operating costs for your business.
In this situation, using factoring services can free up your account receivables, thus getting your business debt-free financing that is equal to the face value of your invoices.
When you sell your invoices to a factoring firm, A/R funding process turns these invoices into instant cash.
With the help of this cash, you can fund new business ventures, launch a fresh marketing campaign, or get more orders while fulfilling payment requirements with vendors and payroll.
The following are the benefits that you can get through accounts receivable factoring: • You can easily receive financing between $10,000 and $500,000.
• There are no fees or penalties.
Only a discount fee will be deducted.
• You can get an advance up to 90% on an invoice.
• There is no obligation on long term contracts.
• There's fast turnaround time (4 days) by the factoring company on funding decisions.
• You can sell single invoices or you can opt for bulk factoring.
• The factoring company will communicate with your customers on payment against the invoice (s) and collect the money on the collection date.
As a small-business owner, if you are still struggling to attain working capital for the growth of your business or if you need to meet cash flow shortages, then it's time for you to re-think your current cash flow plan.
As the typical ways of financing have gotten limited, you can turn to A/R financing anytime without holding back any of your business plans.