More Funding Needed for Expected Growth
Small businesses are anticipating some solid growth in 2015. One survey showed that 58% of small business respondents anticipate sales growth this year. But with the growth, additional funding is needed. In the same survey, 41% reported they will need external funding to continue to grow.
That result is indicative of the needs of small businesses overall in maintaining a growth trajectory. Many small businesses have significant proportions of their assets tied up in overdue accounts receivable. Because of delays in customer payments, which may range from 30 days to 60 days or even 90 days, they are often short of cash flow for working capital requirements, including making payroll, covering other current expenses and being able to invest in marketing and sales for future growth.
Factoring to Improve Cash Flow
One way to dramatically improve cash flow is to factor your receivables with a competent factoring company. Factoring enables you to receive immediate cash by selling your receivables to an experienced factor. The factor advances a high proportion of the value of the invoices. And when your customer pays down the invoice to the factor, the factor remits the balance, less a small fee for its services.
A qualified factoring firm can manage the receivables and collect the amounts due from your customers. The factor should do this in a friendly manner that will enhance your relationship with your customer.
Some high-quality factors will offer you the option of credit protection, meaning that you can collect on your receivables even in the event of a customer’s bankruptcy or insolvency.
The Bottom Line
If you are a small business owner who anticipates significant growth in demand for your products in the next 12 months, contact BusinessCash to discuss accounts receivable factoring and the options available to you.
BusinessCash has been helping companies in a myriad of industries with their cash flow needs for more than 20 years, and is in a position to provide you with outstanding factoring services.