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Many companies of all sizes seek working capital financing, or factoring, as a cash flow solution to international receivables. Factoring, or purchasing accounts receivables (AR) for cash, is currently a very popular means for exporters, product suppliers and sales companies to meet the ongoing costs of business operations. Whether your company is a recent startup or a well-established enterprise, you can benefit greatly from such a cash flow solution for smooth, profitable, ongoing business.
How does working capital funding compare to working capital bank loans?
The majority of business owners and corporate officers find the benefits and convenience of professional working capital funding far greater than those of traditional working capital bank loans or lines of credit. Although some working capital funding or factoring may be more costly than a bank line of credit or working capital loan, it is almost always easier to obtain. Especially in today's uncertain world economies, many businesses of various sizes find it quite difficult to gain access to business funding through banks. Banks are often hesitant to approve new business ventures for financing services, and even businesses with fairly good track records must show reports of high profitability levels in order to receive working capital loans from banks.
Over the past few years, a major source of working capital for small businesses has been credit cards. Both personal and company or corporate charge cards have often served as financial support for ongoing business funding and financing needs. However, with today's limitations on lending policies, many credit card accounts no longer make this practice possible. In addition, credit card companies that still do allow this type of continuous charging now make it much more expensive to the cardholder. As a result, many business owners and officers who once relied on charge cards to supply a constant flow of working capital are now making good use of AR factoring or working capital funding.
What financial security is provided with use of AR factoring by growing companies?
If you are a business owner or a corporate executive in need of immediate cash flow solutions for your business operations and success, you should seek the security of accounts receivables factoring. With the aid of this form of working capital funding, you can easily obtain the necessary finances for meeting payroll, paying monthly bills and increasing your business growth and profits. Applying for AR factoring is easy and usually involves no fees.
Many providers of working capital financing will grant your company, upon funding approval, up to 85% of the AR they purchase within just a few days' time. Additionally, many factoring companies allow you and your company, as funding recipient, to decide which invoices you want to factor. These lenders believe that flexibility is the key to a successful working relationship, and for this reason, they make a practice of offering the borrower as many options as possible throughout the lending process. An open policy to such flexibility is especially advantageous where international receivables are concerned.
Your factoring partner then handles all collections relative to your international accounts receivables for you. They will initiate and manage all communications with your customers concerning these factored accounts. Continuous benefits of AR factoring for your business include:
• Predictable Cash Flow. – You will not have to worry about the reliability of your international client base payment schedule since your AR factoring partner provides your business with a regular flow of cash.
• Increased Sales Rates. – With regulated cash flow through your agreement with a working capital funding agent, your sales rates will increase. In addition, your company will experience definite growth, which helps to increase your funding limits.
• Convenient, Fast Funding Arrangement. – Another benefit of AR factoring is the speed with which the funding approval and lending process can be finalized, facilitating fast, efficient funding to sustain, strengthen and grow your business operations.
Whether your enterprise is a small startup entrepreneurial business, a 10-year-old mid-sized company or a long-enduring corporate entity, to enjoy the security and support of ongoing cash flow funding, you should consult a professional accounts receivables factoring company. With the flexibility and convenience of the continuous funding they offer, your company can experience outstanding sales growth, profitability levels and business success.