The Benefits of Receivables Financing

Managing the finances of a new firm can be difficult, especially when you have invoices with net 30, or net 60 days. How are you supposed to keep up with payroll or start a new job if you haven’t been paid for the last one? This is how the big companies stay big, they have the capital to bite the bullet and keep going perpetually. It doesn’t have to be this way when you are small. With accounts receivables financing (factoring), you can increase your cash flow and take on bigger and better jobs immediately!

How Does Accounts Receivables Financing Work?

Accounts Receivables Financing, or “factoring” as it is sometimes called, is a simple process. First, you sell your products or service to your customer, as you normally would, and are issued an invoice for payment by that firm. You then sell that invoice to a third party (like CaptialPlus), and receive cash! Once your customer pays the third party, the rest of your money is returned (minus fees). After this, the cycle begins again!

What are the Benefits?

Payment Immediately!

• Because the Accounts Receivables Financing company pays you right away, you do not have to wait 30, 60 days or more. You are no longer stagnant –  free to complete the job, pay past bills, fund the next job… whatever is needed. You are paid in advance on future payments. 

It’s Based on the Customer’s Credit, Not Yours

• It can be hard to get traditional financing from a bank or other source if your company is young and doesn’t have established credit. Accounts receivable financing takes your debtor’s credit and trustworthiness into account much more than that of your own company. What the bank can’t get done, we can!

It’s A Flexible Alternative to Traditional Financing

• Unlike a bank or other source of financing, there is no long-term contract or obligation involved. Some companies don’t even require you to finance every invoice from the same debtor, only the ones that you need.

Yes, accounts receivables financing is not right for every construction company, but for others, it’s a lifesaver. If you would like to discuss how it can benefit yours, contact us or call us at 865-670-2345. We would love to discuss your options.