If you want to grow your business, you’ll probably need funding at some point. The challenge, however, is that it’s difficult for startups and businesses without a solid track record to obtain bank loans. As a consequence, many small business owners rely on their personal credit to secure loans. Getting approved for loans, of course, depends on your credit score. Let’s look at some ways to improve your credit score so you can fund your business. Read more
A business credit card is a useful tool for helping you get the cash you need for essential expenses. However, if you don’t use it the right way it can cause you some serious problems. The following are some of the most common financial mistakes that business owners make with their credit cards. Make sure you don’t fall into any of these traps yourself! Read more
One decision every business has to make is whether or not to extend credit to customers. Providing customers with credit allows them to obtain goods and services now while paying for them later. At the same time, you have to be careful to do this in a way that’s responsible and doesn’t harm your cash flow. Let’s look at how to extend credit in a way that’s beneficial to both businesses and their customers. Read more
Riviera Finance provides many tools to help your business improve cash flow and grow faster. One of these is invoice factoring, where you obtain immediate cash based on purchase orders and outstanding invoices. However, in certain situations, conventional invoice factoring may not be enough.
For example, suppose you have a customer who wants to pay for your products on credit. Your supplier, meanwhile, demands cash. In this scenario, you’re compelled to come up with immediate cash while you wait for your customer to pay. Such situations, which are quite common, can stretch you thin and make it hard to find the cash you need. Riviera Finance has an effective credit enhancement tool that helps you deal with these situations.
A Simple Way to Obtain Credit When You Need It
A supplier assurance letter is a document created by Riviera Finance that assures your creditors that you have a valid purchase order, specifying the amount and that Riviera is acting in the position of factoring company for this transaction. Once Riviera approves the customer for factoring, you can obtain such a letter quickly.
Obtaining credit from suppliers is not always easy. With an assurance letter, however, it’s far more likely that the supplier will extend credit to you based on your customer’s purchase as it removes risk from the transaction. This is a useful service that provides credit until you deliver the product.
Take Advantage of Credit Enhancement with Riviera Finance
Small and mid-sized businesses must constantly seek ways to improve cash flow and meet their obligations. At times, they also need alternatives to traditional bank loans. It’s easy to get stuck in situations where you must deliver services before you get paid. Obtaining an assurance letter from Riviera Finance helps you develop favorable relationships with suppliers who might otherwise be wary of extending you credit. You can think of this type of credit enhancement as transitional credit that helps you strengthen your cash flow position.
When you get supplier assurance letters, you won’t be in the difficult position of paying out cash for products before your customers pay for them. This is just one of the financial tools offered by Riviera Finance that can help your business grow.
If you’re seeking invoice factoring, a supplier assurance letter or another type of assistance with business finances, contact Riviera Finance and find out how they can help you.
You Might Also Be Interested in the Following Articles:
A shortage of working capital can be a serious problem for a business. To a great extent, your cash flow determines your ability to grow. Bank loans can help in this regard but many smaller businesses have difficulty securing a line of credit large enough to fund substantial growth. One solution to this problem is invoice factoring, a creative financing option that lets you receive cash immediately for invoices. Let’s look at some of the advantages of invoice factoring and how it can enhance cash flow and spur growth for your business.
Getting Cash When You Need It
Invoice factoring helps to solve an ongoing challenge faced by many businesses. Typically, you have to wait weeks or even months for customers to pay invoices. This waiting period limits your cash flow. With invoice factoring, you’re able to receive payment on invoices immediately. The factoring company then collects payments from your customers.
Invoice factoring provides you with additional working capital that you can use for any purpose, such as buying more inventory, hiring additional employees, marketing your business or investing in new equipment. The requirements for invoice factoring are less stringent than for traditional loans.
If you have an existing loan outstanding, and have already pledged your business assets as collateral, a factoring company might still be able to supplement your cash flow through a process known as subordination.
When a factoring company enters into a subordination agreement with your bank, where the bank subordinates its collateral position on receivables, the factor takes on the role of an additional creditor. This allows you to leverage accounts receivable and purchase orders and obtain cash when you need it. Companies that aren’t eligible for loans or that could only access a small line of credit on their own can often obtain more substantial loans through invoice factoring and subordination.
In order to obtain conventional bank loans, you need a strong credit history. You may also have to provide outside collateral. Newer or smaller businesses often have difficulty meeting these standards. This can create a vicious cycle where you can’t grow because you don’t have enough capital and you can’t get the capital you need because you’re too small. Subordination provides a way out of this dilemma.
Once your bank agrees to subordinate receivables to the factoring company, you can use your accounts receivable as assets, giving you access to a greater line of credit than you’d otherwise be able to get. In any case, invoice factoring is a viable way for many businesses to get financing even when their banks turn them down for any type of loan.
Riviera Finance Helps You Grow Your Business
Riviera Finance is one of the leading invoice factoring companies in North America, with more than 20 locations in the United States and Canada. Riviera has more than 1,400 clients and has been providing financial services to businesses since 1969. Riviera Finance can help you obtain the working capital you need with invoice factoring and other customized financial solutions for businesses. See how you can get started now.
You Might Also Be Interested in the Following Articles: