Accounts receivable finance-related articles.
As Bank Lines Get Scarce, Alternative Cash Flow Providers Get More Popular
In these tough economic times bank lines of credit are becoming increasingly hard to find. In some sectors credit availability has dropped more than 30%, and existing lines of credit are being capped or closed without warning. These are especially bad omens for businesses hoping to increase their working capital through small business loans. Suddenly small businesses that relied on credit backing to compete with large corporations are charged with finding their business capital through other avenues. Luckily there is a light at the end of the financial tunnel, and new/alternative forms of financing such as accounts receivable financing (factoring) are filling the void.
Invoice factoring, or the sale of accounts receivable for cash, is an ideal and even preferable substitute to traditional bank lending. In fact factoring companies such as Riviera Finance bring a number of advantages to the table that banks simply can't. A review of these advantages makes the appeal of factoring abundantly clear.
To begin with, factoring companies are usually willing to assume more risk than traditionally cautious banks. While a customer must demonstrate a regard for his financial obligations, factoring companies don't require a long history of good credit as banks often do. This is particularly good news for new businesses who haven't yet had the opportunity to build up a credit history but who need cash on hand to succeed.
When a business needs working capital it most likely needs it today. With that in mind the application process with a factoring company is usually much quicker than with a bank. Whereas the processing of a bank loan could take months, Riviera Finance can process your application in a short time span ranging from two days to two weeks. This quick turnaround time allows our clients to increase their cash flow when they need it most: in the present.
Invoice factoring companies also offer a number of services banks and traditional lending institutions do not. For example, credit services are available to check future clients, which helps to eliminate bad debt. Factoring companies can also assume collection management duties for you and offer back office support; allowing you to reduce collection and administrative expenses while improving your efficiency and bottom line. Best of all, because you are selling your accounts receivable factoring is not a loan. This means that unlike a traditional loan, you won't be incurring debt while improving your working capital.
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