It’s not unusual for small businesses to run into situations where they suddenly have too little cash on hand. This can happen no matter the health of your company or whether you are in manufacturing, transportation, distribution, or professional services.
Fortunately, there are numerous ways to manage cash flow in order to improve the profitability of your small business. For example, invoice factoring uses your accounts receivable as collateral so you can harness the latent cash in your unpaid invoices. If you are wondering whether to incorporate invoice factoring into your ongoing cash management strategy, consider these five benefits:
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1 – Fast Access to Cash
Do you need fast access to working capital to hire more staff, purchase more inventory, or take advantage of early payment discounts from suppliers? With invoice factoring, you can unlock cash from your invoices immediately. Summit Financial Resources can assess your small business quickly and determine if invoice factoring is the right solution for your short-term cash flow challenges. If you are an established client in good standing, we can anticipate your needs and offer expedited funding, sometimes on the same day.
2 – Cash Flow Stability
A cash flow crisis can be triggered by any number of factors, from a shortfall in sales or late-paying customers to higher-than-anticipated expenses. Regardless of the reason, the resulting inability to cover day-to-day expenses can put the future of your small business at risk.
At Summit Financial Resources, we can loan up to 90% against your invoices, allowing you to stabilize your cash flow and cover operating costs or meet unexpected challenges. The process is simple: we give you a line of credit using your outstanding invoices as collateral, and your loan is repaid as your clients pay those invoices.
3 – Financing Flexibility
Summit Financial Resources specializes in lending programs designed to give small businesses like yours the flexibility to keep your company growing. In addition to your outstanding accounts receivable, we can consider inventory and equipment as additional collateral.
With our inventory financing add-on program, we provide a line of credit based on your physical inventory in addition to your accounts receivable. You pay it back when the inventory is sold through our invoice factoring program. Combining both products allows you to use your company’s assets to access significant additional capital.
4 – Extra Support
Summit Financial Resources offers additional support to help you manage your business finances. This includes services that work in conjunction with products like invoice factoring such as assisting in collection efforts to get your factored invoices paid faster.
Small businesses involved in our asset-based lending programs also have access to our proprietary online account reporting system. This service allows you to check daily transactions and track information on the total funds received and the invoices the money has been applied to. You can access the credit reports we pull on your customers, monitor their payment trends, and adjust credit terms if necessary. We also respect your relationships with your customers, and we take special care to manage payment transitions smoothly and to handle all transactions with discretion.
5 – An Alternative to Online Lending
Online business loans have become a popular financing option, with cash advance companies and online micro lenders providing capital to small businesses that otherwise would not be in a position to secure credit. The technology used by these alternative players is fundamentally changing the way small businesses access capital, creating greater competition, convenience, and price transparency.
However, online lending is not for everyone. Many small business owners who have worked with unregulated, nonbank lenders have paid a price for speed and convenience. Alternative loans often come with APRs ranging from 20% to 80% and considerable penalties for not meeting repayment terms. In addition, these lenders tend to be volume-based and lack the personal touch of a relationship lender.
When you choose Summit Financial Resources as your financing company, you get far more than a loan. You’re working with a partner invested in your success. We bridge the gap between easy, but expensive financing and lower-cost, harder-to-get loans, creating custom financing solutions with reasonable rates and structures that banks and other commercial finance sources cannot provide.
At Summit Financial Resources, we are proud to partner with our customers and have delivered hundreds of millions of dollars to help them cover short-term costs and invest in opportunities for long-term growth.
Working Capital Financing is a few clicks away.
Summit Financial Resources specializes in working capital financing for small to medium-sized businesses that need increased cash flow. We provide working capital financing through invoice factoring, asset-based lending, inventory lending, and equipment financing.