For small businesses, accumulating growth capital can be challenging. With revenue going toward regular financial obligations, covering the cost of customer orders, and paying off existing loans – setting working capital aside for business growth can force entrepreneurs to move goal posts and extend timelines. Fortunately, there are ways to leverage receivables to achieve business growth, without having to resort to bank loans.
Accounts Receivable Financing
Accounts receivable financing is a very powerful service which gives entrepreneurs the means to get paid quickly from open invoices, facilitate accounting, and amass capital for business growth, all without having to take on additional debt. When accounts receivable financing is used, any invoices submitted by your business are converted to cash within 24 hours. Additionally, the responsibility of tracking down payments from customers is transferred to the company providing the financing services. With revenue coming from one centralized source almost as quickly as invoices are generated, business growth can be achieved very quickly.
Asset-based financing creates a revolving line of credit, structured around owned property (inventory, equipment, real estate, etc.) and receivables. By creating this extra source of working capital, entrepreneurs will have the purchasing power to acquire equipment, expand facilities, and complete other internal projects to position themselves for successful growth. Asset-based financing is one of the few programs available that increases with business growth. As a business expands, makes more sales, acquires new property, and purchases more inventory, the spending limit on the asset-based line of credit also increases. This is a very tangible result of business growth which can help companies prepare for the next stage of development.
Purchase Order Financing
Purchase order financing is very unique, in that it is designed around future receivables in order to promote business growth by allowing entrepreneurs to carve out a large market share for themselves. Purchase order financing is an advance in capital to cover the cost of filling large customer orders. Once the order is filled, the cost of the financing is rolled into the amount on the invoice. When the customer pays in full, the financing is subtracted, and the remainder goes right to the business. By giving entrepreneurs the ability to take on larger order while still maintaining regular operations, the capital necessary for business growth can accumulate in no time.
Achieve Business Growth
If you need extra capital for growth, without having to take on unnecessary debt through bank loans, call Lavan Financial Group at 203-308-4547. We provide a wide array of solution to promote business growth, without placing a strain on your cash flow.