Concept Marketing Group Inc.

Close This Window

---

Free Do-It-Yourself Press Release Kit

---

Fill out the information below to receive our free e-book. We'll automatically redirect you to the download area.

First Name: * Last Name: * Company: Email: * Phone #: Are you interested in any of the following? Press Release Writing Services Press Release Distribution Services Notify me of special offers and promotions Subscribe me to the Getting Results newsletter

---

Close This Window

On Receivable Financing and What It Can Do to the Business

by: johnlair on Date: Mon, 13 Dec 2010 Time: 1:52 PM

Receivables are things that cannot be avoided in a business. As much as we want to be paid immediately by our clients, there will be times when they will ask us for credit. It will take them several days to pay the product or service that they obtained from the business.

Too many receivables have caused problems in the cash flow of some businesses. Because of the still unrealized income as a result of a lot of receivables, the business plan gets disrupted. The result of a disruption in the business plan will be accounting problems and, worse, the business itself accumulating debt due to the lack of immediate cash on hand.

Accounts receivables are not really bad. In fact, they are already being considered as income for the business. The only issue with them is that they are unrealized income and what we wanted for our business to have immediate funds so that the cash flow and the business plans do not get disrupted.

Some of us will try to find a way to get much needed cash as we still wait for the receivables to be finally realized. We will need the cash as capital to sustain the operations of the business. In order to convert the receivables into cash while waiting for them to be actually realized, we have to seek receivable financing.

Receivable financing is a scheme wherein we are going to sell our business’ accounts receivables to an investor (which is being called in the business parlance as a “factor”). The investor will then assume the responsibility of collecting the receivables from our clients and receiving the payments from them. While the investor does the collecting, we already have the cash to sustain the business’ operations, thanks to the receivable financing. The investor who will buy our receivables will look not on the strength of our business but on the strength of the clients who owe us receivables.

However, receivable financing also has its down side. Doing such scheme would mean us receiving less money because we sold the receivables at a discounted price. Despite that, such an arrangement would still prove beneficial to us, especially when we are in need of quick cash to sustain business operations.

About the Author

For detailed information, please visit us at http://www.merchantcashadvance.com.

Comments

Add Comment