If you run your own small business, you know just how essential cash flow is to your survival and success. You need enough money on hand to pay the bills and be in a position to respond quickly to unexpected opportunities.
Many small business owners use invoice factoring to get quick access to cash when they need to hire more staff, purchase more inventory, or take advantage of early payment discounts from suppliers. Invoice factoring is a type of accounts receivable financing that converts outstanding invoices into immediate cash. This makes it a good solution for resolving short-term cash flow issues.
Whether you are in manufacturing, transportation, distribution, or professional services, invoice factoring can be a key part of your ongoing cash flow strategy. Here are five things you need to know about how invoice factoring can benefit your small business.
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1 – Stable Cash Flow
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. At Summit Financial Resources, we can loan up to 90% against your invoices, allowing you to stabilize your cash flow and cover the costs of day-to-day operations or unexpected challenges.
2 – Fast Access to Cash
Invoice factoring allows businesses to unlock cash from their invoices immediately. Because we are loaning against tangible assets, Summit Financial Resources can assess your 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.
3 – Flexible Financing
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 – Added Value
When you choose Summit Financial Resources as your financing company, you’re getting 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 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. With Summit Financial Resources on your team, you can rely on us to provide as much or as little support as you need. We also respect your relationships with your customers, and take special care to manage payment transitions smoothly and to handle all transactions with discretion.
5 – Support for Small Businesses and Startups
Invoice factoring is a working capital solution for established businesses and startups as well as for companies of all sizes. Small and newly minted businesses often face an uphill battle when it comes to accessing funds from banks or other commercial finance sources. Because Summit Financial Resources is not regulated like a bank, we can be more flexible on deal structures, take more risks, and make faster funding decisions.
Our goal is to help small and growing companies with reputable customers and qualifying invoices solve their operational hurdles by ensuring they have a steady stream of cash. If your business meets the criteria, we can even provide an overadvance or be flexible on debtor credit limits when your business hits a rough patch.
When working capital is tight, invoice factoring is a simple strategy for providing fast cash to take on new orders, fund payroll, or say “yes” to a the chance to expand your business.
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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.