Medium to large businesses often face challenges when trying to secure fast financing. No matter how successful an organization is, there will always be certain obstacles that stand in the way of securing low interest or low-expense financing. Although there is no shortage of banks to apply to, the process of applying and jumping through hoops is often time and resource consuming. One alternative solution to using loans is an accounts receivable factor.
One of the biggest challenges that organizations face is debt. Although there is an ever increasing need to come up with enough money to cover operational expenses, it is not necessary for an organization to go into debt to stay functional. Mounting debt creates bigger problems that can snowball in the future and turn a widely successful organization into an extinct one. Factoring receivables enables businesses to avoid taking on additional debt, because the money comes from selling accounts receivable, so there is nothing to borrow, nothing to repay.
Business loans and other means of financing often have restrictions on how the money can be used. This poses complications for businesses because their operational expenses often encompass many different avenues, not just the ones that loans cover. The money received from factoring receivables doesn’t have any restrictions or limitations on it. Businesses can receive the amount of funds they need and use it for whatever they deem necessary to improve their businesses.
Factoring A/R is a cash advance on money that is owed on certain invoices. In a perfect world, clients would pay their invoices as soon as they received, thus creating a steady stream of reliable cash flow that a business can count on, and however this world is far from perfect. Instead, invoices are paid 30, 60, even 90 days after they are issued, thus creating uncertainty in how a business gains its profits and manages its operational expenses.
Using an accounts receivable factor makes it easier for organizations manage and grow their business. Use our rate form to learn more about Universal Funding and how we can provide your organization the funds it needs to thrive and grow.