Running into a surprise financial setback or two tends to be a commonplace aspect of operating a business. Unfortunately, some hits to your budget have a way of causing more disruption than others. What’s worse, you may not always be expecting where these money troubles are originating. This is especially true if you find yourself in a position where your clients are not helping you with timely payments for services or products that you have provided. In this scenario, it can be a good idea to take a closer look at alternative financing options like factoring solutions.
How the Problem Impacts Your Business
Though your clients are directly responsible for your success in most respects, you never know when they will cause you stress. If a customer does not pay you on time for a service, it might not strike you as a huge issue right away. However, the problem can easily get out of control the longer the payments are delayed. Since you rely on this money to act as your working capital, a setback in this regard can easily cause you to fall behind on other more pressing aspects of your business.
How to Respond
A solution like factoring is a straightforward one to understand. Also referred to as accounts receivable financing, this is a service that is centered around using your unpaid invoices as collateral. The invoices are reviewed by a lender and qualifying receivables are purchased from you. The lender provides a percentage of the total value of the invoices as an advance, then assumes the responsibility of collecting the debt from your client. After you pay a fee and the debt is collected, you will be given the difference that you are owed.
How Your Benefits
Countless benefits come along with using a service like accounts receivable financing. When you find yourself in a position where your customers are not paying for services, you do not want to just sit around and hope for the best. By taking action and looking at solutions, you can stimulate cash flow without having to resort to desperate measures. Since this service is an advance, there is no need to worry about falling into extra debt. All you need to do is remain mindful of the fee you are required to pay for AR financing solutions.
When it comes to your budget, you always want to remain mindful of problems that can appear and cause you major headaches. Take time to look at the details surrounding factoring and see if it is a good fit for your needs.
At Speed of Light Funding, we have a great reputation for helping our customers get the business loans they need as quickly as possible. We offer flexible loans that adapt to your company’s circumstances and are easy to qualify for. We’re friendly and knowledgeable, showing you the best commercial finance options for reaching your goals. With the right loan, your business can grow in amazing ways.