Factoring A/R is a business practice that enables organizations to get their hands on much-needed capital by selling their invoices to a commercial finance company. This finance method is a great alternative to waiting indefinitely for clients to settle their invoices. While some clients often end up paying their invoices in a timely manner, a large majority of clients don’t. Or you’ve offered them terms for payment that extend beyond 30 days. This creates a lot of problems for businesses because they need the money from those invoices right away to maintain their operations.
Even with careful planning, it is often a challenge for a business to determine how much money it needs to function at any given time. As the needs and demands of your organization ebb and flow, you’re going to need immediate access to funds to keep up with those trends. While there is always the possibility of taking out additional loans, loans do not necessarily present the most economical solution. Loans create additional burdens on the backend and have to be repaid with interest.
So what is an organization to do when it is so saddled with debt and expenses that there doesn’t seem to be a way out? The easiest thing to do is to tally up the amount of money that is owed from the invoices in accounts receivable. Now that information alone can’t be used to satisfy any debts that are owed to any lenders, financial investors or vendors, but it can be used to get an organization the money it needs much sooner than later.
Factoring A/R is extremely convenient. It provides your organization with an easy way to get payment from your outstanding invoices in a matter of days. Your organization does not have to spend time or resources to collect upon those invoices. This allows you to extend more lines of credit to clients and increase your business as well.
To find out if factoring your A/R is the solution your business needs to take its operations to whole new heights, click the rate form to contact Universal Funding.