For many small businesses, fluctuations in income, supply costs, and market conditions can result in inconsistent cash flow. When working capital is tight, it can slow down your business. Whether you are in manufacturing, transportation, distribution, or professional services, invoice factoring can be a key part of your ongoing cash flow strategy.
How do you know if invoice factoring is right for your small business? Here are five good reasons to consider it:
1 – You have constant cash flow problems.
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 the industry you’re operating in. However, if you have been plagued by constant cash flow problems, it may be time to focus on your cash management.
There are numerous ways to manage cash flow in order to improve the profitability of your small business. Invoice factoring uses your receivables as collateral, letting you harness the latent cash in your unpaid invoices. The process is simple: a factor gives you a line of credit using your outstanding invoices as collateral, and your loan is repaid as your clients pay those invoices. Summit Financial Resources can provide up to 90% advance rates on outstanding invoices, allowing you to stabilize your cash flow and cover the costs of day-to-day operations, take advantage of supplier discounts, or jump on new business opportunities.
2 – You need cash yesterday.
We understand that there are times when having fast access to working capital is crucial to keeping your small business running. Invoice factoring allows business owners to unlock cash from their invoices immediately, making it a simple strategy for securing the financing you need, when you need it.
Summit Financial Resources can assess your business quickly and determine if invoice factoring is the right solution for your short-term cash flow challenges, so you won’t have to wait weeks for an approval. If you are an established client in good standing, we can anticipate your needs and offer expedited funding, sometimes on the same day.
3 – Your seasonal small business has to keep the lights on year-round.
Maintaining sufficient cash flow is an ongoing challenge for any small business. If your business is seasonal, business financing is a valuable tool for smoothing out your cash flow so your business can weather slower sales periods.
An asset-based lending program like invoice factoring allows you to harness the cash in your accounts receivable to help ensure sufficient cash flow during periods when manufacturing and sales slow down or come to a halt. You can use the funds for ongoing operating expenses like rent, insurance, taxes, utilities, and salaries, as well as to purchase inventory for the next sales cycle or ramp up your pre-season marketing to bring in more revenue.
4 – Big banks are not interested in your small business.
Your small business may not be a priority for your large bank, but it’s a big deal to Summit Financial Resources. We’re a small business too, and we partner with our clients to create custom financing solutions with reasonable rates and structures that banks and other commercial finance sources cannot provide
Summit Financial Resources is not regulated like a bank, so we can structure more flexible deals, take more risks, and quickly make funding decisions. We’re collateral-focused, which means we aren’t fazed by things that are likely to turn off a bank like the length of time you’ve been in business or if you’ve had trouble paying your bills in the past. Because invoice factoring is based on cash flow and customer creditworthiness, what we care about most is if you are providing great service to great customers who are paying you
5 – You want a business partner, not just a 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 offer additional support to help you manage your business finances, including services that work in conjunction with products like invoice factoring such as assisting in 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.
With Summit Financial Resources on your team, you can rely on us to provide as much or as little support as you need. 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.