Receivable financing allows you to improve cash flow and business output.
Receivable financing is a tremendous source of immediate capital for your business. It is a great solution for solving cash flow problems with a business, and also has tons of distinct advantages over more traditional options like a standard business loan or a small business line of credit. With receivable financing you sell your accounts receivables to a third party company that will pay you for the invoices. This gives your business instant cash instead of having to wait to receive payment which is why many businesses run into cash flow issues.
There are many advantages to receivable financing because it gives your business several advantages. Your invoices will be processed by the factors if you choose receivable financing including depositing checks, entering payments, and generating computer reports. It also gives you increased flexibility to extend terms to customers which can translate into more sales and conversions. You can do this without harming your cash flow.
With receivable financing you can also take advantage of discounts on inventory or purchases for your business through being able to buy in larger volumes or being able to take advantages of early payment discounts from the suppliers. There is also no limit on the amount of capital you can get with this financing option because the capital available increases as sales increase.
Other benefits to receivable financing include allowing you to discontinue early payment discounts to customers, giving you more control of the company because you don’t have to take on other investors, and receivable financing also helps you get rid of bad debt.
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