4 Signals Your Business Needs To Consider Finance Receivables

by | May 16, 2016 | Financial Services

Small to large business owners have to deal with constantly changing dynamics within a company. While these changes have the potential to be very positive in the long run, in the short term they can be stressful when it comes to finance. Receivables factoring can be a viable and essential part of a business finance plan to work through 4 different changes that have an impact on cash flow.

Opening New Stores, Offices and Locations

New openings can put a strain on the working capital of an existing company, even if those new locations have been in planning for years. There are always additional costs, which is a good time to use the option to finance receivables through a factoring service.

Having that cushion of cash available that is not a loan and is available to use to finance the new location until it starts to generate revenue can really take the pressure off.

Expanding Existing Space and Inventory

Expanding new space and inventory levels is also a good opportunity to tap into the funds you have already earned but are just waiting for payment from your customers. This allows you to keep your inventory at peak levels, never having to ask a customer to wait.

Increasing the size of the office, adding production lines or simply converting existing space into a more functional area of the business all costs money. By using factoring, you can take advantage of the opportunity to expand when it works for your business rather than having to work around when invoices are being paid.

Hiring more Staff

When you expand your space, open new locations or take on new customers and contracts, having the right staff on hand to meet these increasing demands is going to be critical.

When you finance receivables, you can use that advance to recruit, hire or train professionals to take on these roles in your company, ensuring your customers receive top service and support. This is often a much better option that trying to cut other areas of operating costs to cover new employee recruiting, training and payroll.

Addressing Slow Growth Periods

All businesses will have peaks and valleys in the growth. Some businesses, particularly seasonal businesses, may have greater times when there is less cash flow than in peak times.

Through using factoring options, managers can plan when they need to factor, how much they need to factor and how to best use this strategy to maintain a consistent cash flow all year round.

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