Cash Flow is king – have you thought about accounts receivable financing?

Cash flow is king and, boy oh boy, does that feel real when you are running a small business. Those first few years are the hardest, managing costs with (what feels like) painfully slow income growth. It’s easy to fall into a negative cash flow cycle and that can be deadly for your business. So what solutions are available for start-ups and small businesses?

Accounts Receivable financing, also known as factoring, has been around for a long time. Back in the day it was inflexible, very expensive and often caused as many problems as it solved. AR finance is nothing like it used to be.

How does it work?

Traditionally when you issue an invoice you wait until the agreed payment term is up (30+ days) before payment is received – assuming the payment is received. Therein lies the cash flow conundrum that causes small businesses so much pain. Back in the day, factoring was a clunky process, and it meant handing over a significant portion of the invoice value to get the invoice funds released early.

Today, the whole process works differently. In the 90s it wasn’t unusual to kiss goodbye to up to 20% of the invoice value to get 80% paid immediately. Worse, a lot of the old lenders didn’t accept any responsibility for the debt so, even though you handed over 20% of the value, if your customer defaulted you had to pay back the amount they released to you. Today the terms of factoring are very different and there are a lot of different options so you can settle on one that suits your needs and personal comfort zone. In a lot of cases you don’t pay anything back to the lender and you can receive your cash within 24 hours.

Cashflow isn’t the only reason to consider factoring. Chasing payments from slow-paying clients can be expensive for a small office as it diverts the focus of at least one of their office employees and requires numerous mailings and other communications in many cases. In addition, payment collection can lead to problems between office staff and clients, and this can seriously impact the success of the business and their loyal customer base. And, let’s face it nobody gets into business to become a credit controller. AR allows you to focus on your business and grow without the angst of waiting for payment.

Accounts receivable finance, factoring – whatever you want to call it – is a quick, non-debt way of freeing up your time and cashflow. You have options!

No Personal Guarantee Needed to Grow your Business

Up to 90% funding against you’re A/R

Non-Recourse Financing Options Available

Competitive Rates and Structures

Quick Funding

We’re here for you.