Dynamic Capital Generation Strategies

Companies in all stages of development have to think dynamically about the generation of capital. Leading businesses rely on a variety of capital sources, only one of which is direct income generated through sales of products or services. Approaching the generation of capital from many angles is required if an agency is to remain competitive within their field. AR financing is one of the methods that major players use to generate a steady stream of working capital throughout the year.

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Factoring’s Competitive Advantages

Relying on direct income alone has some disadvantages that need to be considered. Most businesses see seasonal variation in their income and so have to anticipate certain lean months. Additionally, unforeseen market forces can significantly impact customer purchasing decisions. Clients that purchase on account may be slow to make payments or may have a payment plan set up over several months. Factoring can easily mitigate these disadvantages. For instance:

  • Invoices can be sold at any time during the year
  • A simple rate formula is used to calculate the value of an invoice portfolio rather than individual invoice, so capital generation is simple to predict
  • Factoring is a dependable process offered by leading financial firms
  • Working capital generated through factoring is made available right away
  • Unpaid invoices with lengthy terms can be factored

Playing at a Higher Level

The decision makers that lead many mid-sized companies and growing corporations may not immediately see the advantages of factoring, especially if the company has had a dependable stream of income. Factoring and other forms of capital generation can make a business more competitive and more secure by offsetting the risks associated with direct income. This allows decision makers the ability to invest in company development, including training and expansion. Investing in company infrastructure and improving operations is a way to ensure longevity and continued financial security.

Get a Rate Today

Our online rate form can show you right away just how much your invoices could be worth. Refine your approach to working capital by giving factoring a try.