Worried that you won’t have enough liquid cash to meet your payroll obligations at the end of the month? Worried that you simply won’t have enough money on hand to pay your rent and your other bills?
Maybe it’s time to eliminate your stress with receivables financing (also known as invoice factoring).
This type of financing is a crucial tool for small business owners concerned about their business’ cash flow. By entering into a invoice factoring relationship with an outside firm (commonly known as a Factor), you can instantly transform your unpaid invoices – the ones on which you’ve been struggling to collect – into cash. This can put a big dent in your worries over paying your monthly bills.
Account receivables factoring works according to a simple formula: You sell your invoices at a reduced cost, lower than their face-value amounts, to an outside receivable financing company. This company provides you instant cash for your invoices. It then goes about the always difficult business of collecting on these invoices. When it does, it keeps the money it collects, thus making its profit.
It’s a win-win situation for everyone involved: You and your business receive instance cash, a solution to your cash-flow problems, while the receivables factoring company makes its own profits.
Selling or financing your accounts receivable also saves your valuable time. You want to spend your time developing new marketing campaigns for your businesses, fine-tuning your company’s product and services lines and interviewing new sales associates and executives. You can spend more time on these important tasks when you outsource the collections work to a receivables financing company. If there’s anything a small business owner has less of than liquid cash, it’s time.
Don’t be afraid to take the plunge into receivables financing. You might find that it not only eliminates your stress levels, but that it makes you significantly more productive. What more can you ask from one single tool?