Riviera Finance July 19, 2012 No Comments
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Some recent trends from the front lines of small business:
  • 64% of larger companies are paying their bills in 60+ days (Wall Street Journal)
  • Bill-paying is done at an average of 7.6 days overdue, up 14.1% over last year (Experian study)

Here at Riviera Finance, we’re countering the trend, receiving payment from our debtors in only 31 days, one day faster than last year.

The message is clear: the need for immediate working capital is stronger than ever, and Riviera Finance’s factoring services are delivering positive results.

The Problem. The recession ushered in a policy shift among many large companies to slow their payment speed to their smaller creditors. This tactic has not abated despite the overall improvement of the economy. Larger companies learned that it’s effective to stretch payment on invoices to 60 or 90 days or more, and their small-company associates simply capitulate because they lack the resources to fight.

A study conducted by the credit bureau Experian found: “…businesses earlier this spring were paying bills an average of 7.6 days past due, a 14.1% increase from the same period last year. The biggest companies in the study–those with more than 1,000 employees–had the sharpest year-over-year increase in late-payment days, up nearly 28%…”

The Solution. While small businesses may lack the resources to fight this trend, there are things they can do to thrive despite the challenge. One often untapped resource for small business is invoice factoring. Instead of waiting a growing period of 40 or 50 days or more get paid, by selling its invoices to Riviera Finance, a small business can access cash immediately. Factoring provides this quick cash without creating debt (it isn’t a loan), and without the long and often futile process of applying with a bank. In fact, even business owners whose personal credit is less than sterling very often qualify.

Rivera Finance offers nonrecourse factoring, which provides a credit guarantee, meaning that our customers retain the cash advanced to them, even if Riviera Finance doesn’t collect from its debtors. This helps our clients eliminate bad debt, and by tapping into our experience and credit database, they can choose their future customers more carefully and weed out the high-risk opportunities.

Riviera’s credit services are so effective at eliminating high-risk companies from the equation, and our collection processes are so streamlined, that we buck the slow-payment trend reported by The Wall Street Journal. Our debtors pay us in about the same amount of time as they have in years past.

For the full Wall Street Journal article, click here: http://online.wsj.com/article/SB10001424052702303296604577450561434496668.html