Call Us: (888) 624-9566

When to Apply for Accounts Receivable Funding

Selling your accounts receivable is a great way to get fast cash for your business. When you’re up against a wall and don’t see a way forward, accounts receivable funding can help you push through and continue building your business.

Who Uses Accounts Receivable Funding?

It takes steady cash flow to run a business successfully. Not having the cash needed to keep the business afloat can lead to financial failure. Even if your products or services are great and the company is turning profits, there still may be cash flow issues that need to be addressed.
One of the most common reasons profitable businesses suffer from cash flow problems is related to accounts receivables. Businesses offer their customers payment terms, which ties up their income.
This cash doesn’t become available until the client invoices are paid. When you need cash for your business fast, apply for accounts receivable funding to secure the capital you need.

Why Do Businesses Apply for Receivables Financing?

Typically, payment terms are net-30, net-60, or net-90 days. That means you must wait at least that amount of time before expecting payments. It costs your business money to produce services or products. Meanwhile, you’re stuck waiting for months to get paid.
This is especially true when small businesses provide solutions to larger corporations. These entities run their accounts payable departments like a huge, slow-moving machine. There is no negotiating when it comes to payment terms. If you want the contract, you have to play by their rules.
In the meantime, your overhead costs are steadily accumulating. This slows you down from taking on new projects, replenishing inventory and supplies, and growing.  Essentially, you’re running out of cash, which is slowing up your progress. You need capital to run your business while waiting on payments from clients.
Accounts receivable funding gives you access to this cash now, instead of waiting for slow-paying customers to settle up. Selling your unpaid receivables gets you the capital you need to succeed in business.
You get the cash immediately to cover your business expenses. Small business owners can sell part or all of their account receivables to keep a steady flow of cash-on-hand.

Bonus Benefits of Accounts Receivable Funding

When we provide accounts receivable funding to businesses, we take on the responsibility of invoicing your customer. All of that paperwork and wasted time–gone. We take care of it. Because it becomes our capital when we give you a loan, all of the headaches related to it become our problem. Best of all, you still receive the money, minus our fees, with a lot less busywork.
We also deal with collections when needed. Instead of having to run down every debtor who owes you, which is a time-consuming and distressing activity, we will ensure that all of your bills get paid with no effort from you.

Get Accounts Receivable Financing

Whether your company is big or small, and no matter the industry, you’ll probably need business credit at some point. Capital secures cash flow, which supports day-to-day operations. There are also emergency situations where you may need cash fast.
Traditional loans help, but they’re just not easy to qualify for if your monthly sales are below $1,000,000. Accounts receivable loans allow you to secure the financing you need, so your business can succeed.
Come back next week for another new blog post, “Accounts Receivable Funding vs. Conventional Business Financing,” where we will compare and contrast your funding options. 

Contact Us Today

AllFi Solutions is a Brooklyn-based accounts-receivable factoring company. We are true industry leaders who know how to help small businesses succeed financially.
Learn more about accounts receivable financing from AllFi. Call AllFi Solutions at (855) 450-9636 to speak to an advisor today.