Increase the cash flow to your company with receivable factoring

It can be very frustrating for business owners to turn away sales because they have a restricted cash flow which is unable to support them. This can be a huge problem for companies that sell products as they do not have adequate finances to replenish their inventory and capitalise on new opportunities. A lack of funds can also result in companies being unable to pay employees and other bills which can become a problem later on.

Improving the cash flow with receivable factoring

Fortunately, companies that have faced this problem before do not have to suffer any more thanks to the introduction of receivable factoring. This process provides companies with cash upfront in exchange for their invoices. Factoring companies that offer receivable factoring services do not lend money, instead they buy financial invoices which are paid for by the customer at a later date.

How does this help reseller companies?

This process of gaining finances is advantageous to businesses because the timing between expenses and revenues ensures businesses have a steady cash flow that supports new sales and existing operations. Unlike bank loans, companies do not have to worry about interest rates or credit ratings with receivable factoring. This makes it much easier for companies to take advantage of this process.

Transactions in receivable factoring are usually structured as payments in two instalments. The first payment accounts for about 80 percent of the value of the invoice. The remaining amount is given once customers have paid the factoring company. This makes receivable factoring an ideal process for small and medium sized businesses.