WHAT IS RECEIVABLES FINANCING?
One trying aspect of running a growing business is waiting for invoices to be paid. Having working capital tied up while waiting on customer payments affects cash flow and can impede growth.
Receivables financing is a great option for companies that need money quickly, but don’t want to add debt to the balance sheet. It is an asset-based form of financing where the accounts receivables are actually sold rather than being offered as collateral. A great form of alternative funding, it is the only means of business financing that can grow proportionally and immediately with your business as you need it. Some businesses use receivables financing to get started, some use it as a bridge during a period of critical growth, and many use it as a regular means to ensure a predictable cash flow while waiting on customer payments.
Banks and other traditional lenders focus on a business’s creditworthiness when deciding whether to extend a loan. With Receivables Financing, the creditworthiness of the business’s customers is key.
WHO USES RECEIVABLES FINANCING?
The AcceleFunding Receivables Financing program helps companies maintain a predictable cash flow. Cash is available on qualified receivables in as little as 24 hours. This cash can be used to purchase inventory or equipment, make facility improvements, or to meet payroll expenses. Our contract is month to month - there are NO required monthly minimums, and no long-term obligations. Our clients decide which invoices to factor and when. Our process is efficient and reliable. We help clients create a strong balance sheet and build banking relationships. We focus on long range solutions as well as a company’s short term need. Above all – we treat our customers with the courtesy and respect they deserve. We focus on our customers’ needs, and strive to earn their business each and every day.
10 Reasons Companies Use Alternative Funding
- Significantly increase the cash flow of your business. Earned cash is-available for qualified receivables in as little as 24-hours.
- Use readily available cash to grow your business. Funds generated by alternative funding can be used for new equipment acquisitions, inventory purchases, marketing expenditures/ facility improvements, etc. that otherwise may not have been feasible when you needed them most.
- The process is very efficient and reliable. Once approved, our clients enjoy our user friendly approach to doing business each and every month. Payments to our clients are dependable because we understand what a predictable stream of cash can mean to the life of any business.
- Use what you need when you need it. There are NO required monthly minimums for alternative funding and no long-term obligations. We recognize that alternative funding should be a “bridge mechanism” to more traditional financing and that typically our services are a season in the life of most businesses. Our contract is month-to-month because we earn your business.
- Capital availability is flexible. Alternative funding is the only means of business financing that can grow proportionally and immediately with your business as you need it.
- Minimize internal costs associated with collections. Your company will spend less time on collections since we take on most of this task. Thereby, you can focus more of your efforts on higher value-added activities such as sales and production.
- Better knowledge of your customer’s credit. We are extremely proficient at verifying your customer’s credit and ultimately their ability to pay your invoices. This enables you to make more informed decisions on where to target your efforts for the greatest gain and minimize your bad debt write-offs.
- Leverage your customer’s credit rating. Your customer’s good credit rating is one of the strongest assets you can have when using alternative funding. It is their positive history as much as anything that makes this process work for you.
- Alternative funding is not a loan. No debt is created when using alternative funding so there is NO negative impact on your financials. You are not using long-term debt to satisfy a short-term need for cash. This increases your appeal to traditional lenders because alternative funding creates cash in your bank account and not debt on your Balance Sheet.
- Take advantage of early payment discounts to suppliers. Minimize some of your alternative funding costs by leveraging supplier offered discounts for early payment and simultaneously increase your credit rating.